ConocoPhillips breakout pattern points to further upside for energy stock

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ConocoPhillips breakout pattern

Highlights

ConocoPhillips broke above $135 from a cup-and-handle pattern, implying a technical upside target near $168 based on a $33 base depth.
Relative strength index remains above 70 and MACD is above zero, indicating ongoing bullish momentum unless oil prices retreat or geopolitical tensions subside.
The State Street Energy Select Sector ETF (XLE) is up 53% year to date, outpacing XLK and demonstrating substantial sector outperformance underpinning energy stocks.

Chart setup highlights breakout level

As reported by CNBC, the daily chart for ConocoPhillips shows a classic bullish cup-and-handle formation after the stock spends much of the year building a broad rounded base. Shares establish resistance around $130 to $135, then form a smaller rounded handle in September and October before breaking convincingly above $135.

That move sends the stock to fresh highs with limited historical overhead resistance left on the chart. Based on the roughly $33 depth of the cup, the traditional measured move implies a potential upside target near $168.

The analysis does not factor in the company’s earnings results due on Thursday. The view is that large oil stocks are not typically highly volatile on earnings days, with the broader trend often carrying more weight.

Momentum and sector strength support the view

Technical indicators continue to favor bulls, with the relative strength index holding above 70 and signaling sustained buying pressure. The MACD also remains above its zero line, although it is starting to flatten, a sign the rally could pause if geopolitical tensions ease and oil prices retreat.

A pullback toward the former $130 to $135 resistance area would be an important test of whether that ceiling now acts as support. If that zone holds, it may offer a more defined entry point for investors seeking to manage risk while staying exposed to the energy sector’s strong run.

The broader sector backdrop remains supportive. The State Street Energy Select Sector ETF, XLE, is up 53% year to date, more than double the gain of its nearest competitor, the State Street Technology Select Sector ETF, XLK, underscoring the strength behind recent energy market leadership.

In our earlier article on the conflict-driven surge in crude oil shipping costs, we explained how attacks and rerouting risks in key chokepoints like the Strait of Hormuz and the Red Sea have pushed tanker rates sharply higher. We noted that freight and insurance are becoming a much larger share of the per-barrel cost of oil, with knock-on effects for fuel prices, importers, and refiners—even as tanker owners benefit from record earnings.

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