XLE trade ideas
XLE OPEP EXPECTATIONSWe make our trade in expectation of bad results for OPEC`s deal to freeze oil production.
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.
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
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XLE - Buying the gap closeFor those who missed every opportunity as afraid of chasing the price in gold , oil, labu or spx here is a fantastic opportunity : buying XLE (or for the advanced traders ERX 3x ETF)
As oil getting close to confirm the cycle low XLE just working on the close of the opening gap.
I will be adding to my positions at 68.50 in XLE . If you don't want to miss the move you can add right now 50% of the position (68.75) and add the other half at 68.50.
At ERX you can open 50% at 30.96 and the other 50% at 30.60 if we have an exact gap close.
ENERGY STOCKSInterpret the trend lines and channel however you'd like. The money ain't in shorting the energy sector - it's in buying it cheap. I pray we see a correction down to the .618. A correction into .618 would be highly symmetrical and an incredible buying opportunity.
XLE drop to support at 68.07 and then move higher if can bounce If XLE can bounce off of support at 68.07, then setup to move to resistance at 69.88
UPDATE ON ENERGY FUNDS/XLE - HUGE OPPORTUNITY COMINGUPDATE ON LAST RELATED IDEA; XLE/ENERGY STOCKS/OIL/CANADIAN DOLLAR
PLEASE NOTE TIMING FOR OIL'S POTENTIAL BOTTOM/TRAJECTORY
XLE: Potential short setupXLE is right at an 8 month level, and about to hit a key level resistance, so I'd like to get short with a wide stop loss speculating on confirmation of the downtrend continuation in the monthly. You can see the 50% speed line of the recent decline on chart, which would be good to see price respect to stay short or enter shorts here.
Volatility is high, so stick with the 3 ATR stop on chart.
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Risk disclaimer: My analysis is provided as general market commentary and does not constitute investment advice. I will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
XLE: Running Out Of Energy?I feel the XLE has just about run out of steam.
There is substantial resistance at $70. A five wave harmonic pattern with three a-b-c corrective waves has just been completed.
This configuration has not yet rolled-over, but I think it will as the price approaches the 89 day moving average (golden-yellow line).
For those of you who think the USD will get stronger, it stands to reason that the energy sector will get weaker.
I hope this contribution has been helpful. May all of your trades go well. Don.
XLE - ENERGY SELECT SECTOR SHORT SETUPThe price is now in a strong resistance area, the previous neckline in H&S pattern. Pay attention to the price action for shorting opportunities. Possible target a confluence area around 61$ level. Risk reward ratio 3,5.
Two Charts That Indicate S&P 500 Sell-Off, Part 1: XLEWhen the S&P 500 was selling off in February, the Energy Sector, and its related components, sold down and formed a double bottom. There was worry that banks would be in trouble because of non-performing loans to the energy companies. Since then, the energy sector has rallied.
The above chart is of XLE. The energy giants in XLE include XOM-CVX-SLB-KMI-EOG-OXY-APC-COP-PSX-TSO-BHI, and on and on. These are huge energy companies. If you chart these as individuals, most are weak. They are weak for many reasons.
These include: too much supply and too little demand. Many have cut or eliminated their dividends.
XLE has completed a five wave impulse pattern and corrective waves a-b-c are nearly completed. I believe this Elliott wave pattern will result in a down-side directional break of trend (located on chart above, at corrective wave "c", far right, near large red arrow near top of cloud).
Not all indicators are negative, but the top indicator (RSI) is rolling over, the phase energy is weakening, and the alligator jaws (around $65.27 on above chart) are closing. Another negative, the Ichimoku Cloud is lower than structure to the left.
Many of the energy companies individual (charts) are rolling over. They are getting weaker.
Inter-market analysis suggests the following formula (from Don's book of logical assumptions).......
E = MC x 2. Translation: Energy = Momentum Change x 2 (XLE momentum change and XLF momentum change). To me, both are heading lower.
This is part 1 of 2. Please move to Part 2, the chart of the XLF (Financials).
I hope this has been helpful, entertaining, and informative. May all of your trades go well. Don.
long xleOil is starting to look good at this level I will be looking to go long xle to first and second target zone.
XLE turn at the bottomTwo of topping signals, one hammer with volume two, the second broke through the triangle at the bottom. Sunset on the trend on a pullback of the second wave.
$XLE - Daily Chart (Short IT)I think it's time to short it here. Into R2 and approaching the 1.618 fib ext. CL_F is about to tank.. Only reason for run up here.
Buy May $62P's
Energy filled gap and then reversed50 day moving average still supports an intermediate trend of up.
Energy sector at key level This could be setting up for a nice swing trade over the next few weeks/months. Keep an eye on any further breakout and consolidation above shaded rectangle and 50 day moving average in orange.
