Oil Near a Six-Month High: Should You Buy Energy Stocks? 20 Years of Data (October 2026)
By MarketInOut · October 28, 2026
Oil has had a big run. Brent crude traded at $115.71 on October 28, 2026, up 16.3% in a month and 63% above its low of four months ago. Last week it touched $117.49, its highest level in almost six months. Energy stocks have followed: the Energy Select Sector SPDR fund (XLE) is up 55.6% this year and closed on October 27 just 2.4% below the record high it set the day before.
So is a fresh oil high a reason to buy energy stocks, or a sign the move is late? We looked at every time Brent made a new six-month high since 2006 and measured what energy stocks, the S&P 500 and airline stocks did over the next one, three and six months.
The short version
After Brent hit a six-month high, XLE gained 0.9% on average over the next three months, against 2.7% for any three-month period since 2006. It rose in 60% of the cases, against 63% at any time.
S&P 500 energy stocks did the same: 0.4% on average over three months after an oil high, against 2.5% at any time, over 827 trades.
One trade does a lot of the damage. XLE lost 49.5% after the oil high of January 3, 2020, as the pandemic crash hit. Without it, the average was 2.6% against 3.2%: no edge either way.
Airline stocks did worst: S&P 500 airline members lost 2.4% on average over three months after an oil high, against a 2.3% gain at any time.
Today the energy trend is strong: 18 of 21 S&P 500 energy stocks (86%) are above their 200-day average, against 61% for the whole index.
Where energy stocks stand today
As of the October 27 close, energy is one of the strongest parts of the US market:
S&P 500, October 27, 2026
Energy members
All members
Members
21
506
Above their 200-day average
18 (86%)
309 (61%)
New 52-week high in the last 5 sessions
6 (29%)
60 (12%)
Names on the 52-week-high list include Chevron (CVX), ConocoPhillips (COP), EOG Resources (EOG), Kinder Morgan (KMI) and APA (APA). Over the last month XLE rose 9.8% while the S&P 500 fund (SPY) rose 0.5%.
What happened after past oil highs
Average return over the next three months (63 trading days), after Brent made a new six-month high, compared with any three-month period:
Bought
After a Brent 6-month high
Any 3-month period
Energy Select Sector SPDR (XLE)
0.9% (median 3.9%), up 60% of 30
2.7% (median 4.5%), up 63% of 82
S&P 500 energy members
0.4%, up 53% of 827 trades
2.5%, up 57% of 2,240 trades
SPDR S&P 500 (SPY)
1.8% (median 4.3%), up 70% of 30
3.0% (median 4.4%), up 76% of 82
S&P 500 airline members
−2.4% (median −1.0%), up 47% of 87 trades
2.3%, up 56% of 249 trades
July 2006 to October 27, 2026. Returns are price changes on dividend-adjusted prices, bought and sold at the close, with no costs. A new trade could start only after the last one ended, so the periods don’t overlap. Brent history in our data starts in late 2005.
The median trades tell the same story more gently. A typical three-month period after an oil high was only a little worse than a typical period at any time (3.9% vs 4.5% for XLE). The averages are lower mainly because some oil highs came just before big falls: January 2020 (−49.5% for XLE), September 2018 (−28.7%) and May 2008 (−19.7%). The best ones came after January 2022 (+25.3%), November 2010 (+24.3%) and November 2020 (+21.1%).
Does the holding period matter?
Holding period
XLE after oil high
XLE any time
SPY after oil high
SPY any time
1 month
1.0%
0.9%
0.7%
1.0%
3 months
0.9%
2.7%
1.8%
3.0%
6 months
1.8%
5.3%
5.3%
6.0%
Over one month, energy stocks did about as well after an oil high as at any time. Over three and six months they did worse. Oil momentum carried energy stocks a few more weeks at most.
Is one period driving it?
Since 2010: XLE averaged 0.4% over three months after an oil high (23 cases) against 2.9% at any time. SPY: 1.8% against 3.6%.
Without the January 2020 signal: XLE averaged 2.6% against 3.2%, and SPY 2.6% against 3.2%. The gap gets small, but oil highs still did not add anything on average.
Airlines without early 2020: 1.2% on average over 82 trades, about half the 2.3% they made at any time.
The opposite signal: after Brent hit a six-month low, XLE averaged 2.0% over three months (20 cases). Big oil moves in either direction were no better than average for energy stocks.
A trend rule worked better than a high
Instead of buying at oil highs, we tried a slower rule: hold XLE only while Brent is above its 200-day moving average, and move to cash when it falls below.
2007 to October 2026
Annual return
Max drawdown
2008
2020
XLE while Brent is above its 200-day
6.6%
32%
−10.2%
+1.4%
XLE bought and held
7.5%
69%
−37.6%
−31.6%
SPY bought and held
10.7%
52%
Dividends included in the fund prices. 100 trades, 43% winners. Cash earned no interest. Since 2010: 6.0% a year with a 33% drawdown, against 8.4% and 67% for XLE bought and held.
The rule gave up about one point a year but cut the worst fall by more than half, mostly by leaving before the 2008 and 2020 crashes. Brent is above its 200-day average today. Over the whole period, SPY beat both versions.
What this means
A new oil high was not a buy signal for energy stocks. Over 20 years, XLE and S&P 500 energy members did no better in the three months after an oil high than at any other time, and on average a little worse.
Oil highs often came late in a move. Some came near the top of a cycle, in 2008, 2018 and early 2020, and the falls that followed were large.
Airlines felt high oil the most. They were the only group that lost money on average after an oil high.
The trend mattered more than the high. Staying in energy only while oil was in a long-term uptrend kept the drawdown to 32%, but it still trailed holding XLE and the S&P 500.
Limits of this test
The sample is small: 30 non-overlapping signals for XLE in 20 years. A few large moves, such as early 2020, change the averages a lot.
We used Brent, the global benchmark. US crude (WTI) has a shorter history in our data, and its highs don’t always fall on the same days.
“Six-month high” means a new 126-trading-day high. Other windows (3 or 12 months) will give different numbers.
Index membership is as of each date, so the energy and airline tests bought stocks that were in the S&P 500 at the time. The airline group is small, with three members today.
No trading costs, taxes or interest on cash.
How we tested
Signal: Brent makes a new 126-day high.
Trade: buy at the close on the signal day and sell after 21, 63 or 126 trading days. A new trade starts only when the previous one has ended.
Comparison: the same holding period bought on any day, back to back, over the same dates.
Energy and airline members: S&P 500 members of the sector or industry at the time, up to 30 energy or 10 airline positions, equal amounts in each.
Data: prices adjusted for dividends and splits, delisted stocks included. Each test ends on October 27, 2026.
Run it yourself
Opening formula for the oil-high test on XLE:
ticker(xle) and (price new_high 126)@brent.i
In the Strategy Backtester, set “Close position after” to 63 bars. Change ticker(xle) to index(sp500) and sector(energy) to test the energy members, or to ticker(spy) for the S&P 500 fund.
The trend rule, opening formula:
ticker(xle) and (price > sma(200))@brent.i
Closing formula:
(price < sma(200))@brent.i
To see which energy stocks are in an uptrend today, paste this into the Formula Screener:
index(sp500) and sector(energy) and price > sma(200)
