Image Source: Pixabay

Energy stocks were hot in 2022. Many believe that they will continue to be among leaders in 2023. We don’t think so, not because of our preference or because of fundamental analysis. We simply look at the chart and see a very tired XLE ETF. At the same time, we look at the tech sector, particularly semis stocks with the semis phenomenal weekly chart, and see the exact opposite. In line with our 2023 forecasts, we see semis to be among the sectors that will be bullish in 2023.

First, the XLE ETF chart.

Visibly, this chart is tired. It held up very well, right at the 2022 highs, but it is giving up. Unfortunately, there is not a lot of support below 82 points.

The odds favor a move lower, not necessarily a crash but just a pullback that might turn this chart too tired to break out to new highs in 2023.

(Click on image to enlarge)

Next, the semis chart.

We see the exact opposite picture on the semis ETF chart. There is plenty of support in the 360 – 390 area. Moreover, we can clearly see an inverted head and shoulders setup in the making which is a bullish pattern.

(Click on image to enlarge)

We believe semis will have more upside potential in 2023 than energy stocks.

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