$XLE today & Relative Strength
Today's the day after a long weekend, and my contract on XLE felt it.
Let's look at today's performance and prep for decisions as I'm about 13 working days out before the expiration date March 6.
Using the chart above, I have three different tools in place. First, the defined channel I've set for myself. We saw XLE drop from the morning time today, when we saw a low of $53.18, but there was a recovery and saw it close at $53.75. In the chart, we can see that even though it was relatively low in comparison to last week's performance, the support was not crossed. Secondly, the RSI never reached the 30 mark, which can be a good sign. And lastly, the MACD and signal are a bit harder to read for me today, but what it does tell us is confirm the low day today. Either way, I am still in the green as of today.
Relative Strength
Yesterday I learned about relative strength. For a quick summary, relative strength can be used to tell us about the performance of a sector in comparison to the stronger stocks that form that sector. Likewise, the relative strength can inform us how a single stock performs in comparison to the entire sector.
XLE is the energy sector, where the main three stocks that make up ~42% of it are XOM, CVX, and COP. Let's look at today's closing, compare it to last friday's.
| Asset Name | February 13, 2026 Close | February 17, 2026 Close | Ratio |
|---|---|---|---|
| XLE | $54.35 | $53.75 | ~1.10% |
| XOM | $148.44 | $145.40 | -2.05% |
| CVX | $181.96 | $179.05 | -1.60% |
| COP | $111.43 | $108.78 | -2.38% |
In the table, we can see a significant drop in the big three, and while individually each one of the big three dropped by roughly ~$2-3 each, the entire sector only lost $.60 in comparison. So, the overall sector is still outperforming the individual stocks, but it is definitely something to keep in mind and observe for tomorrow.
Thoughts and Decisions
Since the position remains profitable, I am re-adjusting my stop loss. While my original stop was at $51.90, I am moving it up to $53.00. I’m making this adjustment because Theta decay (time decay) will begin to accelerate with only 12 days left. This tighter stop will help minimize potential losses and protect my remaining gains.
If XLE remains flat over the next two days, I will consider exiting the trade entirely, as Theta will start taking money daily. Overall, this has been an incredibly insightful trade. Even if my original target isn't achieved, the lessons learned have been invaluable. In the future, I plan to implement a "take-half" strategy when trading multiple contracts to guarantee the return of my initial investment.
Let’s see what tomorrow has in store for XLE and the Big Three.
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