XLE trade ideas
XLE Broke Significant Support on Crude Price WoesPlease check out the full article here: oilpro.com
The Energy Select Sector SPDR® Fund (XLE) has been battered, and it is starting to bruise.
With the price of crude now just hovering $43 per barrel, this exchange-traded fund (ETF) is likely to get a whole lot cheaper.
This fund has support near-term because Wall Street is discounting recent events in the oil industry, as they did during the second-half of 2014. It also pays a dividend of 2.93 percent (SEC 30-day).
Thinking back, the Federal Reserve's call that lower gas prices (via lower oil) was "unambiguously good" is striking a nerve with those laid of in the energy sector, which shed nearly 68,000 jobs last month alone.
With a technical perspective, the XLE has confirmed downside weakness with a close below the major support trend created on 2009's bottom.
The trend's momentum could weakening slightly as traders fish off the bottom, but the strength of the trend still remains quite strong - ADX over 20 and a substantial divergence between +/-DMI.
Near-term range for XLE is $64.39 and $71.46, while a "relief" rally could spark buying up to $74.12; but, crude would have to play nicely.
If current price support breaks, XLE will trend lower within the disjointed angle (purple dotted line with grey shaded body), which represents widening support and resistance.
Additionally, the "death cross" is close to completion on the weekly chart. This bearish technical signal occurs when the 50-week moving average dips below the 200-week moving average.
At $43.27/bbl, crude is less than $2.00 about its inflation-adjusted price.
Please follow me on Twitter @Lemieux_26
Check my posts out at:
bullion.directory
www.investing.com
www.teachingcurrencytrading.com
oilpro.com
Low cost trading solutions:
www.fiverr.com
Energy Select SPDR -XLE - Daily/Weekly BEARISH WEDGEThe falling volume through the rally coupled with the rising, converging trend lines could be a sign that XLE is going to re-test the lows and potentially drop far under the lows.
In order to enter this trade though, I'd like to see XLE fall under the wall of volume at the 80 level and breach 79.5 before going short. You can sell on weakness below 79.5 and on rebounds to the 80 level and target the 72-71 level within a month. Typically wedges only need 1/4 of the time of the wedge to completely retrace.
The rally can be assumed to be a short squeeze, which is what falling volume is trying to tell us. If there really aren't buyers supporting this advance, then XLE can just fall on low volume. You don't need to see expanding volume on the downside in order to stay in this trade once short (breaking 79.5), but you do want to see the the market break 78 within one week once in the short. Look for 76.5 to be a big wall of support for a bounce, then once under 76.50, look for 75, then 72 as key levels of support.
Tim 1:31AM EST Thursday May 14, 2015
XLENotes on chart. As I do think there is a SHARK on USO, target not yet met - I wouldn't be surprised to see a bit taken back here - especially with everyone so bullish here. I don't see a pattern calling for it - but certainly would not
establish a long now.
Xle time to turn back down? I've been waiting for this nearly two weak, two weeks ago I found out there was a gap at 82 area. Now, the is filled already, also, the chart looks a little lit exhausted to run up. The M top could be exited here. To be honest, I could be wrong. But, anyway 1st target 79.
XLE $82.98: Formed a 5-month base on breaking above 82.43XLE formed a 5-month base over 71.70 on breaking above the 82.43 range ceiling (February 16, 2015), triggering further bullish momentum towards the next resistance levels including 85.97 (March 10, 2014 higher low) then 89.22 (November 17, 2014 lower high). The immediate support levels are 80.30 (21 week moving average) and 79.21 (April 13, 2015, near 200 week moving average) which should hold dips.
Outlook:
Short term: Buy on pullbacks
Long term: Bullish
XLE - Signs of recovery?Rising 20, Rising 50, 20/50 cross - all good signs. Watching 50 MA to support
XLELong term move up on XLE...not the down trend link is at the 200 dam. This ETF can be a good play as oil bottoms and may continue to old highs using options I have a Jan 16 Call LEAPS that is 7.25 and expires 3rd week of Jan 16..the BE for this to break-even is 87.25...current projections show much faster advance to that point, however that is if all keeps going like it is ...that never happens but best probable guess
XLE - Interesting Trendlines Confluences. This is interesting, Explains the recent chops in the Market and Energy stocks.
If this so called bottom in oil any good, then we should see some improvement in this sector, along with this HUGE sector, the market will get better.
Apart from this chart - DIA - Broke out. MDY - Broke out. The next is SPY ? we shall see.
-------
as a note to fellow traders, At any given point in time, you should know where the Sectors are. This should drive your trading decisions. Not a news article, that says, "oh Oil is at the bottom, buy them"
At resistance zone and in the PRZ of a small harmonic patternFrom this week's Weekly Markets Analysis.
The aggressive bullish C entry near 73$ was successful and now we are at resistance.
Will it make a small pullback before the rally to complete the bigger pattern?
In case of a pullback - 75$ will be a good target level
Energy - Is on support and could be due for a rebound
Note:
I am not sure if Crude bottomed at 44 or it will reach 24 in 6 months.
if the bottom has been reached on Crude, XLE's bottom could be here (technically acceptable)
XLE - A look at absolute and relative performanceCharted above is the performance of XLE on both a relative and absolute basis. Looking a both offers some additional perspective on the health of the sector vs. focusing solely on the underlying price of the index.
On a relative basis, this sector broke down from a long term trend before it became fully apparent in the price. XLE had well defined support going back to 2006. It was the break of this support that really got the price moving lower. It looks like for now the sector has found support on a relative basis at a level that goes back to 2005/2006.
Looking forward, if the broader market continues to move higher its possible the sector will stabilize around these price levels while continuing to move lower on a relative basis. However, any market weakness and XLE could underperform even more significantly. The next area of interest for the sector is marked by the shaded box above. The sector traded in this range for nearly 4 years from 2000 to 2004. This area is also the projected price target for breakdown in the descending wedge marked above.
Individual plays and short term bounces may present themselves but from a mid to long term perspective, I don't see an attractive risk-reward for this sector at this time. Something worth keeping a watch on for sure though.
XLE, bullish divergence?1 month ago, i warned that if price failed to regain above ~88.70 it might mean a potential wave 5. And indeed it happened with a gap down passing by the bear flag and previous support of 82.05.
My short entry triggered at 88.06 and i exited fully at 75.45.
Once that little black gap is filled, i humbly tell myself that the OPEC created wave 5 is completed, plus the bullish divergence in MACD & RSI.
Two days before the black gap, there is a BULLISH ENGULFING candlestick pattern on 28th & 31st Dec 2012 with massive volume. And this ~71.34 level also have 2 confluence supporting lines extended previously.
Any price between 70-75 is a good average buy for me :-)
Projection/Speculation for the next few months is formation of inverted H&S to fill that wave 4-5 GAP
Apologize for complicating lines
XLE Energy Sector (Daily). Potential Recovery Rally.XLE Energy Sector (Daily)
Potential Recovery Rally.
Bullish reversal 15/10/2014. Heavy volume turn.
Uptrend, with higher lows.
Broke downtrend_line.
Clearing 50 sma resistance.
Broadening reverse Triangle.
RSI bullish.
Oil potential rebound. ( attached )
Wave 5 brewing for XLE?Channel B is a typical health uptrend. But things get out of control and went euphoric producing a Head & Shoulder at extended Channel A. Price fell back to Channel B and launched another break out but failed due to double resistance of neckline which is also Channel B resistance.
Subsequently, it was a one sided affair from the bears hitting price straight below channel B and culminated momentarily at downtrend channel bottom.
Using the simplest EW wave analysis i understand, i am seeing the maturing of wave 4. As highlighted in the blue resistance region, which arises from confluence of downtrend channel top + Channel B bottom + horizontal resistance. If there is a break out and price go higher, 200ema will be a good rejection point. If blue resistance is very strong, once price started to head lower.. i would consider wave 4 completed.
Essentially i am anticipating a final wave 5 to be in play which could be leveled around 77 or lower, by then we would have a lower low in price and higher low in both indicator to give a stronger signal to long.
Energy sector looks badPrice make a solid broke out since late March, and ultimately form a H&S top which ultimately broke down to previous R/S line. Now price is going to re-test ~88.70 again, further rejection would mean freefall for energy sector.
Even if price broke out 88.70 again, 200ema is another resistance level.
Energy Select Sector SPDR (ETF) (NYSEARCA:XLE) Is LeadingToday the markets are seeing some ugly declines and to the average investor, there seems to be no bottom in sight. Everyone is looking at Ebola as the culprit for spooking the markets. While this might be true, I am looking at Energy Select Sector SPDR (ETF) (NYSEARCA:XLE) as the reason this market has seen a dramatic fall recently. I wrote an article a couple months ago as seen here, discussing how the Energy Select Sector SPDR (ETF) (NYSEARCA:XLE) had diverged from the overall market and was talking to us. While this market might have some more downside to it, I am looking at the weekly chart of Energy Select Sector SPDR (ETF) (NYSEARCA:XLE), as you can see, we are into a very good support area here around $77.25. In my opinion, it is the XLE chart that will dictate the market direction, not Ebola.
If you are looking for market guidance and direction, make sure it comes from the Elite Round Table.Our FREE market emails contain information that can actually make you money for both short term trading and long term investing.
Parm Mann
Elite Round Table
Follow me on twitter: @ParmMannTrader
