Energy, Wall Street's worst-performing industry in 2020, could see its fortunes improve in the new year after its price action surfaced a technical buy signal on the charts on Dec. 30.

The bullish development in S&P 500 energy sector is called a "golden cross," which is conventionally defined by technical analysts as the 50-day moving price average rising above the 200-day moving average. On Dec. 30, the index closed up 1.6%, its 50-day average rose to 266.26, eclipsing the 200-day average at 266.21.

It is up 5.1% in December. But it remains on track for its biggest yearly collapse on record and is the worst performing of the 11 S&P 500 industry sectors, owing to the global economic contraction during the coronavirus pandemic that crushed demand for oil, natural gas and fuels like gasoline.

Energy is down almost 37% year to date with one trading session left in 2020. The best performing sector is Information Technology, up 42.3%. The benchmark S&P 500 index is up 3% for December and 15.5% for the year.

"Golden crosses may be considered bullish technical patterns in theory, but in practice, they don't always play out that way," Paul Hickey at Bespoke Investment Group wrote in a note on Dec. 30.

Bespoke showed that of the 11 golden crosses for the energy sector since 1990, one-week and one-month performances were positive more than half the time after they occurred. However, the performance was negative six of 11 times over three months and six months.

Oil and oilfield services shares have been boosted by higher oil and gas prices and rekindling of oilfield activity. Crude prices have more than doubled from spring lows, spurring companies to bring back production that was shut earlier in the year and complete wells that were not hooked up to pipelines.

A Dallas Fed survey of energy executives released this week found 49% of them expected their companies to increase spending on oil and gas exploration and production next year. An index of activity in the bank’s Texas, southern New Mexico and northern Louisiana territory went positive this month for the first time in a year.

“We are optimistic that we will have a weaning of excess oil supply, and more importantly, suppliers of oil and gas, and that will lead to a slightly higher sustainable price,” one energy executive said. The same survey of 146 energy firm executives found more than half expect publicly-traded, independent E&P companies to decline to between 37 and 48 companies, from the current about 60 firms.

The selloff in energy this year accelerated the erosion of the industry's relative share of the overall stock market, which has been in decline for a decade.