On Wednesday, energy stocks broadly rallied in the U.S. stock market. As of the time of writing, Occidental Petroleum (NYSE: OXY) surged over 3.6%, Apache Corporation (NASDAQ: APA) rose more than 3.4%, and ConocoPhillips (NYSE: COP) also gained over 3.4%.

On the news front, Brent crude oil futures soared nearly 7%. With major airstrikes resuming in the Middle East, market expectations that the conflict between the U.S., Israel, and Iran would soon end have cooled, driving international oil prices higher and boosting the energy sector's performance.

From a technical perspective, U.S. energy stocks may still have room for further upside. Measured by the S&P 500 Energy Index, the sector's prior sharp rally and subsequent correction have formed a classic "bullish flag" pattern. Analysts believe this pattern typically acts as a continuation phase, and once it breaks out effectively, the subsequent gains could approach the magnitude of the previous "flagpole" stage. Based on the "measured move" calculation, the target for the S&P 500 Energy Index is around 1,207 points, indicating a potential upside of roughly 35% from current levels. However, if the index breaks back below the upper trendline of the flag pattern, it could fall back to near 800 points.