SPDR Select Sector Fund - Energy Select SectorArca
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Finally we have a reversal candlestick on the weekly chart in XLE. It's not just a simple reversal candle but a key reversal. Those who follow me for a while know that this is one of my favourite candlestick especially on the weekly charts. The daily key reversal is also very good. But the weekly is rare one and almost always followed by big follow through candles - in this case green ones.
The bullish key reversal is valid when: the bullish monthly (daily) candle (green candle) low is below the previous month's (day's) candle low and the bullish reversal candle's close is above the previous candle's high. Even better the key reversal is when the bullish candle's open is below the previos candle's close and the close above the high of the previous candle's high. I used to call the key reversal a super swing also. Actually we will get a swing low when we berak above this week's high next week. But I think as we printed a key reversal it's no use to wait for the swing because after the weekly key reversal the swing is always coming... And it's usually arriving with a big gap.
Many will ask why didn't we wait for this reversal then we could have a better entry price. The reason because no one can tell if this kind of reversal ever coming or not. And this is the time when it will be hard to tell when to enter here... The time to enter in ERX and XLE was Friday. Of course we might open where we closed but watching the volume and violence how ERX and XLE was rallying on Friday I say there is a decent chance that we open by a big gap and my early entry will be in big plus. And while many will be waiting for a gap close price might never look back again just run...
I will come back to this weekly chart many times in the following months. The next mission is to close back above the 10 EMA and break the trend line.
I really can't tell you how far it can go as this sector is really suppressed right now. If the sentiment is changing it will need to work down the divergence between the energy sector and the SM what is at all time highs. So I really think this rally will be not just big but a very fast surge with all the analysts and traders trying to short it who missed the bottom. Their stops will accelerate this move. I will be watching closely the indicators: The RSI should get overbought in the following months plus MACD neeeds to cross over and head higher. And the SlowStochastic needs to get overbought and stay there for weeks...
The volume is really good for a reversal again. Notice how the volume spikes signed the previous bottoms in the past.
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And here is our gap. And a possible island reversal.
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Hks6996
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Any update on ERX Arpi?
michaelkid_wang
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@Hks6996, Don't expect the update until it goes up. Sooner or later you can make some money depending how late you can endure if you don't trade on margin.
Hks6996
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@michaelkid_wang, no margin cash... just don't want to wait too long if I should possibly cut my losses, this is a 3 times Bull ETF so there is a built in decay on this, like an option...
michaelkid_wang
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@Hks6996, I think you should have set the stop loss. No offense, but it is you who need to be responsible for your hard earned money.
Hks6996
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@michaelkid_wang, no offense... was trying to explain thought process was not looking for advice...
ArtFly
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Thank for update. Too big losses on oil 50 % positions on Forex cut and stop loss hit on ERX Thursday (24,5).
Good luck guys
DS77
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Bullish engulfing candle!
Nice chart. I love energy the second half of this year.