Wolfe Research notes that over 80% of energy stocks hit one‑month lows last Friday, indicating a near‑term sector reset.
The firm expects a 6%‑8% rebound, potentially returning prices to recent highs as the sector regains its 50‑day moving average.
Equipment and service companies showed notable strength, and Wolfe identified two bullish longer‑term setups that could benefit from the pullback.