XLE trade ideas
ERX / XLE - Waiting for GodotI know it looks like never want to break to the upside.... But at the end of a day it will.
I see a head & shoulders pattern under construction. I have corrected the trendline : on the 18th of May we had a trendline back test.
Our key level is: 68.88$ . Once we slice through that level we will be sitting on one of the biggest bull train of this year.
Patience. Our day is coming.
XLE Long OpportunityWaiting for an entry at XLE, its very hard to break the downside channel and start plummeting imo. Good for a mean reversion play here.
TRADE IDEA: XLE SEPT 15TH 57/JULY 21ST 67 PMCC** -- Poor Man's Covered Call.
One of the few sectors that hasn't benefited from the post- November election run-up is XLE, so I'm looking to get into a bullish play here where price of the underlying is comparatively low.
Here, I'm basically looking to emulate a full-on covered call using a deep in the money call in September to stand in for stock, 100 shares of which would be somewhat pricey here, comparatively speaking. A covered call with the same short call would cost 64.56 to put on; the Poor Man's shown here is far less than that. Additionally, if you're looking to acquire XLE shares at some point, the setup gives you the flexibility to reduce some cost basis up front before acquiring the shares, after which you can exercise the long call instead of being stuck with shares with a cost basis of 64.56/share here, as you would be with a covered call here.
Unfortunately, as a form of diagonal, there aren't many metrics to look at, but this is what we do know about the setup:
Max Loss/Buying Power Effect: 7.21
Delta: 61.59
Theta: .75
Generally, you work it like a covered call, rolling the short call out to reduce cost basis in the long aspect of the position. However, on break of the short call, your long call won't be subject to "call away" as it would be with stock; in that event, look to exit the trade profitably and redeploy or roll the short call up and out for a credit if you want to continue to reduce cost basis in the long through expiry.
Notes: The pricing of the setup will probably be different during the regular NY session. I'm working with off hours quotes here, and the bid/ask on the back month is particularly wide here, so overall pricing of the setup may be inaccurate.
Energy Sector Bounce! Hey Traders, We are seeing a setup for a possible trend reversal in Energy. I recently posted an idea regarding energy and in that idea, I explained why a new micro trend may be beginning. I am seeing the same setup again and have entered a long position to take advantage of another micro trend.! Be sure to check out my previous idea "Energy Sector Rally! New Micro Trend Beginning" (Idea linked below). All of the same signals are happening here again! There is also a possible Bearish Cypher Pattern that may complete near $68.30. I will be taking a smaller target for this reason and may even decide to flip the trade to a short if my target is met.
Entry- 67.85
Stop Loss- 67.40
Target- 68.30
New Gold and Silver analysis coming soon. Good luck Traders!
XLE Possible ReversalI will be looking to enter a long position if the next push of sellers fail to move the price lower than the previous support level.
XLE Inverse Head and ShouldersWe can see an inverse head and shoulders pattern on the hourly chart. Due to the weekly macd negative momentum and the longer term downtrend, I would think it's more likely for price to consolidate for a bit rather than move higher right now.
Energy Sector about to Drop! Good Short Term Trade Setup!Hey Traders, XLE is currently at a major level of Resistance and has a shooting star candle on the 1 hour chart. Also price is being rejected by the 20 period SMA. This is a high probability setup! Lets see how it plays out as there may be many things to learn from this trade..
Entry- 66.80
Target 1- 66.20
Target 2- TBD
Stop- 67.40
Energy: an outperformer to come?The Energy sector has been "hated" by investors for a while. However there maybe an opportunity for that sector to outperform the S&P500. XLE, the Energy ETF, is down by 13% since mid December 2016 and back to its lows of 2016.
XLE/ERX - Trend line attackI'm not satisfied with the performance of our XLE and ERX position. Sooner or later the rally will start here also... The more time we spend below the purple trend line the bigger breakout will come. On the 4th of April we broke above the trend line but lost it in a week. On the 4th of May we printed a new low in this decline on very high volume. Most probably that day was the bottom. If stocks are printing a correction during the next 2 weeks - unlikely - we might test back 65.82$...
I think when we break above the purple trendline again that will be a valid breakout and the great rally in oil stocks will start finally.
I will try to trade some individual stocks also. There will be stocks which will print 4-500% rally in the next 3-4 months.
I think ERX also has a good chance of printing a 200-300% rally.
All the indicators (MACD, TSI, SlowStoch) are showing a divergence. I'M preparing for 2 scenarios:
1. We are churning around the trendline for a few more days and breaking out
2. we test back the lows at 65.82$ and a monster rally is coming out of the double bottom.
Nasdaq, S&P, Dow Jones at all time highs. I see zero chance that oil stocks will miss this rally.
XLE 20 Day MVA Decision PointLooking at the past few months on the downtrend. When price reaches the 20 day MVA (red line), it either pushes higher to the 50 day MVA or pushes lower to a lower low. I will be looking for price to move higher or lower from it's current position with those targets in mind.
XLE False Break Downwards?XLE appears to have just gone through a false break downwards and returned back to the important 67.7 level. I would expect this price to continue up to around the 68.9 level, as that appears a good spot where the price will meet the 50 day mva and is also a monthly pivot level. Right now, I would expect price to continue heading higher or meet a little bit of resistance at the 67.7 level before heading higher.
Long XLE by Selling Jade Lizard June 65put, 68.5/69.5caXLE started to bounce back from bottom. I expect it to be going up and then start side way. So I would setup a Jade Lizard position.
Position:
Sell 1 June 65 Put
Sell 1 June 68.5/69.5 Call Spread
Total Premium: 1.04$
Break Even: $63.96,
Profit area: $63.96 $69.54. No upside risk.
Pop %: 84%
Low Energy In Energy SectorThe Energy Sector SPDR Fund XLE has been in a defined bearish trend for all of 2017. Due to this bearish movement, the 100 day moving average (DMA) is about to cross below the 150 DMA. This actual event has occurred 15 times in the history of the fund and has a minimal drop of 0.263%. It has a median drop of 2.067% and maximum drop of 38.054% over the following 16 trading days. Although I typically write on events that have occurred, this event is likely and greater benefit could be gained by making moves earlier.
When we take a look at other technical indicators, the relative strength index (RSI) is at 40.2699. RSI tends to determine trends, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. The current reading declares the fund has been moving lower. The RSI has been trending lower since May 2016. Even though the RSI typically cycles between overbought and oversold levels, that has not necessarily been the case with this fund. Overall the RSI is failing to make newer highs which is another significant signal of downward movement. Only once over the past year has the RSI broke above this trend before immediately following suit and heading down. This overall downtrend should continue as long as the RSI stays below this trendline.
The true strength index (TSI) is currently -19.3683. The TSI determines overbought/oversold levels and/or current trend. I solely use this as an indicator of trend as overbought and oversold levels vary. The TSI is double smoothed in its calculation and is a great indicator of upward and downward movement. The current reading declares the fund is down.
The positive vortex indicator (VI) is at 0.7572 and the negative is at 1.0678. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. The current reading declares the fund slightly moving up recently, but should begin its downtrend again.
The stochastic oscillator K value is 21.2870 and D value is 19.7285. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the stock is trending up. When the D value is higher that the K value the stock is trending down. The current reading declares the fund has been flirting with oversold territory for at least two weeks. Most likely one of two things will occur. The fund will continue to slowly move down with up days causing the stochastic to stabilize and rise even though the fund continues its downward bias. The second possibility would have the fund rise up and out of the downtrend either temporarily or permanently.
Considering the moving average crossover, RSI, TSI, VI and stochastic levels, the overall direction appears to be pointing down. Based on historical movement compared to current levels and the current position, the stock could drop at least 3% over the next 26 trading days.
XLE above the gap open hereThis is a quite possible Monday bounce play. Decent odds for upside Monday.
