The energy sector has suffered a decline along with the broader equity market over the past few weeks. Its relative underperformance now appears exaggerated as metrics of energy sector benchmarks are sending opposing signals supporting a relative recovery. Upswings in natural gas and WTI crude oil prices should contribute to improved relative performance. The sector’s exposure to energy commodities offers a relatively low correlation to the S&P 500, which is attractive given the possibility of a resumption of the seasonal correction in the coming weeks. While scanning the sector for opportunities, we found Devon Energy (DVN) interesting due to its breakout gap following a successful test of a key January support at $41. The gap has near-term bullish implications, and short-term momentum has improved according to the daily MACD indicator and weekly stochastics. DVN appears poised to test resistance defined by the cloud model (the shaded area on the charts). The approximate level is $49 on the daily and weekly charts. A breakout above this would solidify a long-term reversal on the chart for a medium-term target of secondary resistance at $55 based on a Fibonacci retracement level. We would consider adding relative exposure to the energy sector as it benefits from the “great rotation” out of the megacaps. In absolute terms, we would limit new long positions to stocks like DVN with positive technical catalysts. – Katie Stockton with Will Tamplin. Access Fairlead Strategies’ research for free here. DISCLOSURES: (None) All opinions expressed by CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, the Internet or any other medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS OF USE AND PRIVACY POLICY. 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