Energy lags in April. What two traders are watching in 2021’s top sector

Energy lags in April. What two traders are watching in 2021’s top sector

He added that Exxon Mobil, the fund's largest holding, was close to reversing a longer-term downtrend.

"I think the charts are telling us a very bullish message at this point in time," Johnson said, pointing to the Energy Select Sector SPDR Fund (XLE), which tracks the group.

In an interview Friday with CNBC's "Trading Nation," Craig Johnson, senior technical research analyst at Piper Sandler, said the group's charts told a positive story.

Energy stocks sank Friday, ending April as the month's worst-performing sector despite slightly stronger-than-expected earnings from oil giants Exxon Mobil and Chevron. It is nevertheless the top-performing sector for 2021, up nearly 30%.

Energy has gone from first to worst.

"This is a stock that looks like it's got more room to run and a sector that looks quite positive," he said.

However, many money managers tend to disregard the sector because it makes up only about 3% of the entire market for stocks above a $25 million market cap, Johnson said.

"What we're seeing right now is that a lot of portfolio managers really are not getting involved with the energy sector even though the charts are saying that you absolutely should," he said.

As the biggest sector gainer year to date, energy looks set