For investors looking for momentum, iShares U.S. Energy ETF (IYE Quick QuoteIYE - Free Report) is probably a suitable pick. The fund just hit a 52-week high and is up 53.7% from its 52-week low price of $24.49/share.

Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:

IYE in Focus

The iShares U.S. Energy ETF seeks to track the investment results of an index composed of U.S. equities in the energy sector. It has AUM of $2.91 billion and charges 41 basis points in annual fees.

Why the Move?

The coronavirus vaccine rollout is gradually helping control the spread of the outbreak across the globe. Accordingly, the global demand and economic growth levels are on the path of recovery from the pandemic-led slump. The optimism surrounding the gradual reopening of global economies and increasing demand is painting a rosy picture for cyclical sectors.

The energy sector has also been gaining investors’ attention on the latest rally in oil prices. Oil prices have been rallying amid the Russia-Ukraine geopolitical crisis. Russia’s move is leading to a rise in oil prices as it is among the world’s largest suppliers of oil and natural gas. There are other factors as well supporting the oil prices. The coronavirus vaccine rollout is gradually helping control the outbreak's spread across the globe. The optimism surrounding the gradual reopening of global economies and increasing demand is painting a rosy picture for cyclical sectors. This is making funds like IYE an attractive investment option.

More Gains Ahead?

It seems like the fund will remain strong, with a positive weighted alpha of 43.50, which gives cues of a further rally.