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XLE trade ideas

Corrective pullback in US Energy sector in the coming monthsWe have been bullish US Energy since early 2016, but price action in the past months is beginning to give us some cause for concern. With the 50% retracement of the 2014-2016 fall now reached, but not decisively broken, and stochastics very overstretched, we believe a corrective pullback is now developing. Additonally, the Energy sector is also showing signs of weakness relative to the SPX, suggesting Hedge Funds and other 'big players' could be moving assets into more promising sectors. However, whilst we believe a correction is due, the longer-term charts continue to improve, and we view this pullback as a multi-month buy-into-dips strategy, as prices are expected to trade higher into 2017Q2+.
AMEX:XLE
by Michael_Macdonald-XATSUK
XLEEnergy stocks have rallied enough here. Unable to break key Fib level with divergent momentum and an OPEC that will most likely not come to an agreement. Oh yeah, and junk bonds have rallied way too far as well. All in all, this sector has had everything in the world go right to get to this point and it's still flagging. We could see some sideways chop for a little bit, but over all, I think this puppy is headed much lower, below the January lows, but probably not till much later in 2017.
AMEX:XLEShort
by KlendathuCap
BEARISH RATING - XLE (SPDR SELECT SECTOR - ENERGY)It's been about seven sessions since we first issued our real time rating on XLE as bearish, and we still believe there will be opportunity to the downside. Volatility should continue as headline risk prompts uncertainty in the markets. Even if Saudi Arabia did happen to freeze or reduce production, it could not be enough in the long-term to offset production by Iran, Iraq, Russia and US shale producers. Furthermore, as we stated well over a year ago, the continuously slowdown in global economic growth will put a damper on crude prices. Here is our note from 9.14.16: Fundamentally, we do not see a meaningful resolution between Saudi Arabia and Russia curtailing their massive crude production, in part do to the unwillingness of Iran to freeze production until it reaches 4 m/bbl per day in production. With Russia - and most of OPEC - continuing course, any production cuts by domestic producers will be offset, and the supply glut will continue. What is troubling, too, is the IEA reduced its demand forecasts by 100,000 barrels due to weaker demand from Asia. The report suggested that the supply-demand imbalance will last until the first half of 2017. If subscribers remember, we foretasted, in August 2015, that demand would continue to slow due to the global slowdown and that Chinese demand would wane. The inability for the consensus to forecast the sharp decline in global economic growth has left crude prices quite volatile. We expect ongoing EIA inventory data to favor crude bears as the industry heads into the seasonally weak winter months. Technically, a break below $68 will press ascending support. We like the technical indicator make-up that suggests that the next leg of selling is beginning as long as it is supported by key fundamental factors. As bulls continue to unwind longs, the z-score will turn bearish which we prefer on the short-side until -1.5 to -2. Bearish targets are set up on key support. Rating Specifics : Signal Trigger: $67.98 Signal Threshold: $70.02 Signal Opportunity: $60 R/R Ratio: 3.91 Duration: 1 to 3 months _______________________________________ Current subscribers get access to research and analysis spanning multi-asset classes, and real time ratings is a unique way to put research into action. If you would like to be contacted about MacroView Research and interested in subscribing, please visit macroview.co
AMEX:XLE
by MacroView_Research