XLE trade ideas
XLE Prepare to long, analysis of conformation entryExisting Condition:
1. Downtrend line was broken by breakaway Gap (G1). Start a new trend.
2. Gap Up above SMA50
3. double bottom reversal pattern confirmed Weekly demand zone in 11/28/2003;
Use Fib number + simple moving average (SMA) + demand zone (DZ) to verify entry point:
1. 0.382 retracement, DZ1, If price raises above 29 (SMA8)
or
2. 0.5 retracement, DZ2, If price drops below 27.1, and back to above 27.2
or
3. 0.618 retracement, DZ3, If price drops below 26.1, and back to above 26.2
or
4. G2: Gap UP above (SMA50) 29.3, market buy at open.
This is the most strong signal. (See the result after G1 Gap)
The target Size is based on the entry point:
DZ1 to SZ1; DZ2 to SZ2; DZ3 to SZ3;
According to this image, I would long calls of XLE/XOP/ERX, buy PUT of ERY;
I will create another trading plan with detailed Stop/Entry/Target (S.E.T) when one of these conditions could be triggered.
Xle 4 hr chart Just a quick look. Ascending triangle perhaps failure is near. Or breakout. It seems to be breakout but we will see which comes first. Short biased
Doing a little consolidation against the resistanceLooking nice. 10 is over 20 and 20 is over 50, and consolidating between fibs. I believe there should be some upward movement coming.
XLE: Will Energy ETF Fill the Gap?What a difference a month makes! At this time in April, crude oil was in negative territory as the market literally paid you to take barrels away. Now it's rebounded sharply as the economy reopens. On top of that, Memorial Day weekend is coming. Even if coronavirus hurts some travel demand, summer driving season is still around the corner.
That brings us back to the energy sector, which is has spent the last three weeks consolidating. The SPDR Energy ETF held roughly $36 last week. That area marked the highs on March 10 and April 9. In other words, old resistance has become new support.
The next chart feature to watch is XLE’s bearish gap from March 9. If it starts to fill that space, buyers may look for a continued push toward at least $42. That price zone also marks the 50 percent retracement of its decline in 2020.
Overall the move in energy is based on seasonality and a lot of economic drivers. Charts alone may not capture its potential to rebound because the market could also face a macro sentiment shift toward beaten-down cyclicals and away from growth stocks – at least for a few weeks.
If that’s the case, energy could be the top beneficiary – along with small caps, financials and industrials. Within energy, traders with the time may want to take a wider view toward refineries and oil-field service providers.
ENERGY SELECT SECTOR SPDR ETF ( $XLE 1D) the cup is full Everyone is well aware that the current state of the world economy is dire.
In my previous analysis I was following the price of WTI and USOIL (link below) but due to the MAY contract debacle the charts are now trash.
So, now to monitor the advancement of the recovery I will now use the Energy sector ETF XLE. It will not be a leading indicator as a transportation index would, but it can be a good indication of the overall economic activity or expectations.
The recent “crash” is what’s look like capitulation (high spread on high volumes). It could take time to recover. Maybe months.
On a daily time-frame however I identify a pseudo cup and handle pattern. Even if it’s not a full reversal on higher time-frames it can lead to a good swing trade.
The price is now retesting the neckline of the pattern ( 35.90) as a support, so it is a good entry point and a good way to manage risk.
Target 41.60 to close the gap then 47.41 last resistance.
The price made a double bottom several weeks ago.
Bullish div RSI
Let us see how all this will turn out.
As time goes by, I will keep you updated on the evolution of the asset price, so make sure to follow me on Tradingview
If you have any questions or requests, fell free to ask @Djio_ .
Disclaimer : This is not financial advice as I am not a financial adviser.
This is just my knowledge on what can be said and done from the chart.
Due to the volatile nature of the market, everything can change on a day to day basis.
Everyone is wise to manage their risk properly when considering any trading decision or activities.
PS: I cannot emphasize enough the risk associated with the activity of trading ETF due to the imaginary nature of all paper contracts, the reason why I prefer mainly trading cryptocurrencies instead of more “traditional” assets. On the other end without total systemic collapse it can quickly become a good trade opportunity .
Xle pattern I made a good trade to the short side sold early yesterday now back in calls for now looking at a 30 min chart and similar pattern as before. Gap down run up
Energy stocks back on thin iceDeep value investors are all over the energy sector but the technicals are flashing warning signals. If we lose and hold < 35.50 risk opens back up to the lower 30s.
What has my body gotta do with trading ?Read this article here
Just because we have to stay at home due to the lockdown, it does not mean we do not need to take care of our body and mind. In fact, as a trader (be it part time or full time), we spend a lot of time on the computer (sitting down mostly).
Emotions are high as you toggle between different news, charts, forum, etc. Your heart is beating fast as you see your losses turn into profits and wondering should you take profits or not. Maybe, you forgot to put a SL and you were shocked to see your position is now in the red after an hour or so.
Such activity is common for a trader and if you do not have a time out period to chill out and do something outside of trading, you are likely going to suffer from burnout soon.
It was a nice and windy yesterday after the rain had stopped. I decided to go for a run except this time I intentionally slow down my pace and allow other runners to bypass me.
Due to my competitive nature, it does not feel good but I consciously wanted to feel and understand how to better manage it. As more and more runners pass me by and I started to calm down after a while, I realised it was not such a big deal after all. Nobody cares really, who's leading or not.
Everyone is just running according to their own pace. It is the mind that often play tricks on us, misleading us that we are out of control. I came home feeling energised and relaxed and more importantly learnt a valuable lesson. I don't have to huff and puff and run like there is no tomorrow (ya, I know the adrenaline rush when you start to sprint the last part) and yet feel accomplished as well.
That was when I decided to take the shorts in SPX500 yesterday and thank God, I was well rewarded. Allowing too many thoughts swirling in your active mind is not healthy as it need an outlet to reorganise itself. No, not through using drugs or alcohol but a healthy channel like exercise. I urge you to pick up an exercise you like - be it swimming, dancing, trekking, cycling, anything physical.
Build this into your trading schedule so that you purposely know you have to do it and you will not be so stressed up , glued to your PC and constantly worried about your positions. It helps you to avoid over trading too.
For me, I either go for my run or walk so that I can relax my mind, take this opportunity to talk to God, seek his advice on many things I am constantly thinking. I asked for signs, I pray for breakthrough (for myself, family and others),etc. Sometimes, answers come really quick, other times, it surfaced through means that I never thought of. It could be an article, a chart or even staring at my plants in the garden.
When you let go of TIME as in you do not need to force yourself to make $XXX within the hour or so, your mind becomes more relaxed. You are more open to spot opportunities and your judgement is also better. A couple of times, I went on a personal challenge to trade on 15 mins chart to see how much money I can make. It was a scary emotional ride as at the end of the session, I felt tensed and my feelings numb. There were profits and there were losses but I could not feel the joy or pain at all.
That was when I know as a trader, this is not my style. Maybe others are wired differently. The shorter the time frame, the better they perform. I can't and that does not mean I am not good. Like running, each trader is keeping to himself , doing his best , improving his own results and that is all that matters. No need to compete with others !
OPENING: XLE JUNE 19TH 30 SHORT PUT... for a 1.06 credit/contract.
Notes: With rank/implied at 47/57, going bullish assumption here with the notion that oil prices recover somewhat as COVID-related restrictions lift. My general go-to is short strangle, but didn't want to get whipped on the call side if the recovery is dramatic.
XLE - looking to start new wave?Not sure if the wave analysis is correct.
IMO if the bottom trend line holds I expect a new wave 1 to begin pushing to the first target 41.
Thoughts?
XLE mid lineI feel like you study and study and study a chart and sometimes you start to see things you haven't seen before. that's 14 touches on that lines in a little over a month. More of an observation than anything.
Loving thisXLE gaps up overnight. Oil up around 25/barrel.
Loving these call options i bought mid march for .06 a pop!! up 300% right now..
considering dumping them to some monster profits. Which basically eliminate all the beatings i took early on LOL.
Oil Prices Will Determine Where The Stock Market Goes From HereWhile the stock market continues to march higher, economic fundamentals continue to deteriorate. Forward-looking in nature, the stock market tends to discount (ignore) what is happening now in anticipation of what is to come over the next 6-9 months. Although top-down stimulus from central banks and governments have propped up financial markets, economic data points across the globe are signaling a prolonged downturn. For the first time in modern history (BP started keeping recording in 1861), WTI oil prices traded into negative territory reaching $-36.20 per barrel. In essence, storage facilities were giving away oil because they had no more room to store it. Oil markets have been telling us what is truly going on. But are investors listening?
Two weeks ago, OPEC+ decided to cut oil production by approximately 9.7 million barrels per day starting in May. Since that time, energy prices have been extremely volatile, falling further. Why did oil prices continue to fall despite the cut in supply? Lack of demand. Despite the fact that OPEC+ vowed to cut global supply by 10%, the gap between supply and demand has grown. Since the coronavirus accelerated, global demand for oil has fallen by 30%, leaving a 20% (20 million barrels per day) gap after accounting for OPEC+ cuts that start next month.
The lack of demand has been widespread. According to Rystad Energy AS and the Trafigura Group, energy demand is expected to fall by 28-35 million barrels per day. U.S. oil demand has fallen 30% to 14.4 million barrels a day, the lowest level going back to 1990. In its short-term outlook, the EIA forecasts the hit to oil demand will be 16.7 million barrels a day. According to country officials, India’s crude demand (third-biggest consumer) has collapsed by ~70% as the country endures the largest national lockdown. Canadian oil producers expect the gap between supply and demand to reach more than 1.1 million barrels a day in the second quarter. In Spain, oil product demand fell by 23% in March. With gasoline and road diesel falling by 35.5% and 26.5% respectively. In Italy, which together with Spain imposed some of Europe’s harshest restrictions on movement, retail fuel sales have plunged 85%.
The relationship between the S&P 500 and oil prices has strengthened over the last six weeks. The correlation (relationship) stood at .07 (statistically insignificant) in the middle of February, that figure now stands at .86 (statistically significant). Assuming there are no sizable policy stimulus that distorts prices further, I expect oil prices to dictate where the stock prices go from here. Oil price increases driven by short-term reductions in supply will not be enough. Globally, oil makes up 34% of our energy usage. Only an increase in demand will signal a genuine economic recovery. At some point, the stock market and economic fundamentals will need to be reconciled.
-Appo Agbamu, CFA
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