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Energy Select Sector XLE Breaking Out
09/14/2017 2:55 am EST
Trade idea: On XLE, use a pullback to $65.25 to enter or add to long positions, writes Mike Paulenoff, veteran technical strategist, author, and host of MPTrader.com.
We have been watching the Energy Select Sector SPDR (XLE) for some weeks now as it has turned up from its position towards the bottom of its 9-month declining channel. Specifically, it hit a low of 61.81 on August 18.
On September 7, we noted to our members that the XLE had looped up towards a confrontation with its December-September down trendline. At that point, the stock was at 65.09, with its 200-day moving average pointing towards 69.26.
Fast forward a week, and the XLE took out this trendline and closed yesterday at its high of the day at 66.27.
The stock looks poised for still-higher levels that project to a test of the June-September resistance zone at 66.80-67.13.
If hurdled and sustained, this will confirm a significant bottom and also point XLE towards a confrontation with its moderately declining 200 DMA, now at 69.11.
Traders could use a pullback to 65.25 to enter or add to long positions.
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