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XLE trade ideas

A divergence between XLE & USOILHey all, I'm making this post to take note of the clear divergence between XLE (energy stocks) and USOIL (the price of oil ). The movements of these two tickers tend to mirror each other, with good fundamental reason behind why- the price of oil tends to increase the profit margins of energy companies, increasing the profits these companies experience. As it is very obvious, the price movements of the two are now relatively far apart from one another with XLE being far above USOIL . I do not expect this to last, and I expect the divergence to correct itself- as history has always seemed to have done. I imagine there are only two ways to play this divergence... 1. By betting that USOIL will catch back up to XLE , OR 2. By betting that XLE will drop down to match how low USOIL is. I would only consider playing the SECOND option as I consider myself bearish on the markets at the current stages, and believe that XLE is overdue for a significant correction; as the price of oil has dropped significantly, the profit margins of the energy companies in XLE will have decreased, meaning these companies will see decreased profits in their upcoming quarterly report(s), giving a fundamental reason for why energy companies could fall. Moreover, on smaller time frames, I believe that XLE looks as though it has lost momentum & put in a local peak, and is now going to head lower to match how low USOIL has fallen in contrast. I am open to any discussion and would love to hear different opinions.
AMEX:XLEShort
by MichaelEugen1
Long Entry for XLEAMEX:XLE And this is a year to date look at the 11 S&P 500 sectors. What stands out is energy is the only one in the green. We saw an interesting call volume for Jan 23 Strike 95 $ and also from the chart it looks like a breakout soon. So you can already try to trade the breakout before it goes above 95 $ or you wait and put a stop at 95 $ with a tide profit target around 101 $. We see good chances that we will see the 100 $ in the ETF already this year. The ETF is also a good for generating dividend income. At the moment you get 3.91% per year. Stop Buy: 95 $ Stop Loss: 88 $ Profit Target: 101 $
AMEX:XLELong
by tradevola
1
XLE: Looking for some Pullback XLE is in pullback territory. EDIT! I say for TUESDAY but I mean for WEDNESDAY!! Not sure I would be super bearish on this at this point. I know a lot of people are advancing very bearish ideas for XLE, but if we look at the buyers to seller ratios on XLE and XOM, they are huge. Far higher than on SPY on both the weekly and daily time frames. As of the beginning of this week the buyer to seller ration on XLE was 1.30, whereas SPY's was below 1.01. On the daily, after today, the buy to sell ratio was 3.34. This was a first time I have ever seen a buy:sell ratio that high outside of TSLA. Nuts! So buyers are still present and until they back off a bit, I don't want to advance an overly bearish thesis on this. But that said, we are approaching a prime zone for shorting. So tomorrow seems to be favouring a bit of pullback on the prob scale. I decided to get cute with reprsenting the probabilities and I represent them now as a ratio (bull to bear), which is so chicly and appropriately displayed with little rocket emojis. I think, going forward, ideas I post, I will list the probs in this manner, just because they are visually easier to understand. You can see, for tomorrow at least, more bears are showing up than bulls. The ratio 5:0, meaning probability is favouring selling tomorrow. So def looking for some pullback. Targets for tomorrow are: Bull 1. 93.36 2. 94.10 3. 94.84 Bear: 1. 92.94 2. 92.14 3. 91.34 Assessments of the most extreme targets (bull 3 and bear 3) show a preference for bull 3 at 4:1 favouring 94.84, which tells me that we may see a gap up into open. Overall assessment and analysis: You see on the Z Score indicator (set to the 50 candle mark) on the hourly chart it has triggered a sell warning. Sell warnings are triggered when the equity is approaching a previous pivot point on the Z Score scale. It is also in minor overbought territory shown by the orange border. You can see as well in the chart that XLE is at the top of its real time weekly range. It is also hitting the cap of its weekly prospective range, being 94.98. Probs on the weekly favoured 94.98 at a ratio of 3:2. Implications: So what does this all mean? Intra-day, look for pullback. Gap up followed by some selling. But do not adopt an overly bearish mentality quite yet. This is still attracting quite a bit of buyers and while the 1 hour chart looks fairly bearish with a psedo-megaphone pattern and rounding top, we need to see the sellers chill out a bit and I would like to see a decline in the buying volume. We aren't really seeing a decline quite yet, just ranging between buys to sellers with no movement in either direction. We will have to see what next week brings. As of right now, my immediate targets are the bear targets intra-day. This is really the first time I am posting about XLE and was on request. Its a mid-week analysis which isn't all that helpful because the weekly high prob swing targets have already come to fruition. But if the interest is there, I can update with next weeks targets and probs and do an assessment on XLE as I do on SPY. Safe trades everyone! ALSO, FYI! The Z Score you see in the chart is one of my publicly accessible, open source indicators. The version I am using is going to be released as an update probably by the end of the week, I just need to do a video tutorial on how to use it properly. If you are interested, here is the link: Take care everyone!
AMEX:XLE
by Steversteves
14
XLE to break bullish triangle + OPEC cutOPEC threatens to cut oil prices ten times more than in September in an attempt to plug the oil drain. - The New York Times' sources estimate that the agency is considering announcing a cut of between 500,000 and 1 million barrels per day, about 1% of global supply, because the market is oversupplied and demand is softening due to the weakening global economy. This plus the bullish triangle a good take profit could be around 90-93 usd.
AMEX:XLELong
by Fractal-Surfer
2