XLE - the bigger short
Updated
It's a controversial call to say energy prices are going to drop dramatically into next year but this is what the XLE chart is showing.
We're at a double top with monthly bearish RSI divergence, and the same structural trendline where it fell last time. My guess is it could get back down to 50. If it's a C leg it could happen faster than most would expect. 50 area would be a confluence of support - channel trendline and horizontal trendline, also IF a C leg comes, 50 is about 1.618 fib extension from the A leg.
This idea is invalid if XLE can hold above 102 on a monthly close. Good luck!
We're at a double top with monthly bearish RSI divergence, and the same structural trendline where it fell last time. My guess is it could get back down to 50. If it's a C leg it could happen faster than most would expect. 50 area would be a confluence of support - channel trendline and horizontal trendline, also IF a C leg comes, 50 is about 1.618 fib extension from the A leg.
This idea is invalid if XLE can hold above 102 on a monthly close. Good luck!
Note
Daily chart Note
oil daily Note
fib and trendline confluence Note
shooting star daily candle, needs follow through tomorrow. Note
waiting for this line to break Note
lost channel now backtest looks to be getting rejected Note
channel held - maybe one more high Note
under the channel. if they can get it under the 10ma by close it would be more significant. Note
XLE under the 10ma, now fighting at the 18ma on daily, for me this is the line Bulls need to hold. A close below is bearish, above still bullish. Note
under 18ma again Note
Spinning top candle on weekly chart - means indecision. Nest week should tell us more. Note
Oil down another 3 percent today, 70 may come sooner than I thought. 200ma at 65 Note
XLE under the 18ma, any test of it (currently 91) is an objective short. My guess is longs are trapped and it won't rally, but get down to the lower BB quickly (86 area) Note
daily BB area reached, taking a little profit here. Will let the rest ride Note
A small bounce for a few days may act like this. Doesn't have to, but usually the Daily BB area finds buyers, even if temporary. Note
Lower BB was the buy area for sure. Looks like they are going to test the 18/20ma area at about 92, that's also a trendline break area. I'll enter new shorts around there if they can make it tomorrow or Wednesday. It also may be a small correction before new highs, so tight stops are appropriate. on larger positions. Note
dragonfly doji on us oil today. investopedia.com/terms/d/dragonfly-doji.asp
Note
Note
reached 92, I took on a few shorts but light position. It's possible this is a head and shoulders forming, but nothing is confirmed. A break below yesterdays low would be promising for bears. Note
XLE has reached an important previous support zone. It should be resistance now, but so far this is looking bullish. Note
XLE will gap down at open, watch for a daily close under the 18ma for a bearish reversal. I will add some more shorts at open today. Note
latest video talks about oil and xle 
Note
XLE closed below the 10ma but not below the 18ma, I'm keeping my shorts into next week and beyond unless something changes my mind. Note
there's a previous gap n XLE above, but I think we won't fill it. Expecing a sell rest of day (as of now) Note
XLE will open under the 18ma again, a close below will be bearish. If it's a head and shoulders topping pattern, the target is around 83, also strong support area. Note
closed below both the 10 and 18ma today, next support is the daily BB where it may get a minor bounce Note
another test of the daily 18 ma, objective short again Note
USOIL tagged the 18ma this morning, objective short area. A close above would be bullish for oil. Note
XLE/SPY weekly chart Note
XLE rejection at 18/10ma combo Note
XLE approaching the neckline and the daily BB, should find support but if not, the neckline will become resistance Note
major break of support on XLE, any backtest of 88 is a shorting opportunity, what was support should now be resistance. Target 82 Note
test of neckline this morning was rejected. Could bounce there again but I have a feeling they won't allow bulls out. 82 is the confluence of daily and weekly MA's, still my target. Note
be careful with XLE shorts, we have daily hidden bullish divergence on most oil stocks, tightening stops on my position. Note
XLE reached target of 18 weekly ma and support shelf at 82. May go further but I think a bounce is coming from this level soon. Note
XLE is in an area of MA resistance here, so I would think it's an area to collect shorts slowly. 18ma still at 89. Market likely sells and XLE will outperform to the downside, but the bounce here can go higher. Over 90 on a daily close and it may be bullish but I don't think so if the general market is selling off. Note
oil 18ma is 77, i expect it to get tested by tomorrow... Note
We have to be careful shorting XLE, the daily rsi is at the previous lows - which means we have strong hidden bullish divergence. If there is another low, maybe we get to the 200 ma (purple line) but it's very possible the sell off is done for now and they are going to make higher highs while OIL bounces back to 87-88. Just a heads up, I don't know for sure. I'm in cash and I don't really want do short this chart until I see the daily 18ma hold as resistance. Note
USOIL has reached it's 18ma on the daily. That's an objective short but there are a vast number of weekly and daily ma's in the 83 area. I think it going there at the least which may mean XLE has a higher bounce as well Not trading energy for now, just waiting to see what happens. good luck. Note
XLE may lose it's 18ma today or tomorrow. If it does, it's another objective short. target about 73
Note
xle and us oil both losing the 18ma today, a close below is likely pointing to another decline. 
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.