XLE trade ideas
XLE wedgeBeen long on XLE for a while, pretty familiar with its movement.
It's going to be breaking a big wedge soon and I'm rolling with big upside. Oil could be in a better situation but the bull case is better than the bear. XLE should easily be mid 40s.
I expect it to test $40 and fall back down
Energy ETF Is Trying to Turn HigherEnergy stocks were some of the biggest losers of coronavirus. Not only did petroleum demand fall off a cliff in March and April. They’ve also faced a big institutional shift toward ESG investing (electric vehicles and solar energy).
But few things last forever in the stock market. The fundamental backdrop for energy has improved as travel and the economy rebounds. (Air and rail traffic have both rebounded to their highest levels of the pandemic, and jobless claims have dropped to their lowest level.)
This potential turn could be playing out in the SPDR Energy ETF, which holds big names like Chevron and Exxon Mobil .
XLE had a giant spurt higher in June amid optimism about the economy reopening. It then calmed down and has been consolidating since. A few patterns suggest a turn may be coming soon.
First, XLE held the mid-May low around $34.30. If the downtrend were going to continue, that level had to give way. But it didn’t.
Second, the moving averages have stopped falling. XLE’s 100-day simple moving average (SMA) is now rising. Prices are also pushing up against the 50-day SMA. A breakout through here could get some more attention.
Third, prices are squeezing as volatility declines. XLE’s Bollinger Bandwidth is back to the lowest level since the crisis began. That can also indicate direction is changing.
This chart has a lot of potential but no clear signal yet. Traders may be looking for another close above the 50-day SMA for confirmation.
XLE - Market Rotating Into EnergyMarket topping out, oil looks prime for a break out. See $USOIL idea below. Only question is how high can this rally go if the DXY breaks out of its wedge and rips higher?
If the energy sector takes off, that could give the green light for other equities to continue rallying, while equities go down. That would imply a stronger-than-recent USD and higher priced equities for the next few months aka higher inflation.
Interested to see how this all plays out.
OPENING: XLE AUGUST 21ST 32/43 SHORT STRANGLE... for a 1.56/contract credit.
Notes: Camped out at the 20 delta with break evens at 30.44/44.56. Look to manage at side approaching worthless or break even test ... .
XLE ENERGY SECTOR - bouncing from Channel lowsAMEX:XLE is seen to bounce off channel lows & wedge breakout.
35 next targetGot burned on my call options pretty good. Waiting for it to hit 35 before getting back in. Virus cases spiking is forcing this thing down again. Not exactly sure where the bottom is yet, but i am thinking 35 has some good support. If we go up from here i need to see it break to 39 before i feel good about going long..
No position right now.
Energy SetupVery simple TA setup with a 4 hour chart on XLE breaking out of a downward wedge pattern. MACD divergence + crossover of signal along with Psar trigger.
Bullish ButterflyHarmonic patter playing out pretty well here.
Markets still so i am not sure how long this lasts. Oil up and CVX up so XLE follows. In weekly Call options now.
Below Gap FilledShould be able to go long from here. Had to dump my previous calls. Getting back in here.
RSI and MFL oversold. Hoping for a reversal here.
XLE HarmonicLooking like a nice little harmonic pattern here. Lots of room for growth with RSI and MFl on the low side, although still not oversold..
Targeting gaps at 42, and 45 above. In calls right now, looking to dump these when we get to 41/41.5 for some healthy gains.
XLE Long CallsAs noted today by NASDAQ XLE has seen " a $238.6 million dollar inflow -- that's a 2.2% increase week over week in outstanding units" which will lead to major upside movement on XLE.
XLE and CVX need to catch upLooking at USOIL up 3% while XLE and CVX still not reacting with it.
Prices have been moving together pretty well until recently. Energy Markets still nervous about second wave closings i think..
Hoping for some gains on XLE this week. In the red on my call options after things were looking pretty good on Friday. still have some time this week to make up on them.
Energy Stocks Near End of Monster QuarterEnergy is the leading sector this quarter by a wide margin. SPDR Energy ETF was up 38 percent since the end of March through Thursday’s close. That’s 7 percentage points ahead of the No. 2 consumer-discretionary fund . This creates the potential for some positive window dressing with just eight sessions remaining in the second quarter.
There are also fundamental and technical catalysts. The fundamentals are fairly clear: The global economy is reopening. Oil demand is rebounding but supplies are tight. OPEC+ is reining in non-compliant countries like Iraq and Kazakhstan. Meanwhile, domestic drilling has fallen off a cliff. Did you know that the Baker Hughes rig count (a proxy for U.S. production) has hit record lows for the last six weeks?
As usual, oil is a boom-and-bust industry. It just went through a major bust, which may create the potential for a boom.
Technically, XLE is parked at the top of a bullish ascending triangle that it broke in early June. It’s also been fighting resistance at its 100-day simple moving average (SMA). Meanwhile, the 50-day SMA has turned higher and is approaching from the downside. This resembles the pattern on the S&P 500 a month ago before it continued upward. (See below.)
XLE had a tight consolidation pattern around $54 before the bottom fell out in February. Traders may want to view that as an upside target and use the 50-day moving average for risk management.
XLEJumped into some weekly calls yesterday. Took a nice bounce off the .618 fib line.
Next target is 42 stop losses at 39
Technical Indicators pointing up
