Trading Strategy – Energy Select Sector SPDR ETF

One of the more noteworthy developments in recent days has been the move in energy stocks.  The sector may be bottoming as a number of bullish technical development signals potential reversal for the worst-performing S&P sector this year.  The Energy Select Sector SPDR ETF (XLE) fell more than 9 percent YTD while the S&P has risen nearly 13 percent.  Below is an update look at a trade in XLE.

The graphic below is from our “U.S. Market Trading Map”, show the near-term technical bias and trading ranges.  As shown, the underlying is in a short-term bullish trend when the price bars are painted in green.  The underlying is in a short-term bearish trend when the price bars are painted in red.  The yellow bars identify period of neutral or sideways trading pattern.  Additionally, the light-blue shading represents the short-term trading range.  A move above or below that range is considered overbought (as represents by the red shading) or oversold (as represents by the dark-green shading).  Readings above or below the red and green shaded areas are considered extremely overbought or extremely oversold.

Chart 1.1 – Energy Select Sector SPDR ETF (daily)

Our “U.S. Market Trading Map” painted XLE bars in bright green (strong buy).  Over the past few days, XLE has been basing sideways using the 38.2% Fibonacci retracement zone as support. This is a bullish development, represented an orderly high-level consolidation…Click here to read more.

You see, our trend-following system is very unique as it attempts to pick turns before others see them. Timing is everything and if you’ve applied our system correctly, you should have made a killing in any markets.


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