ENERGY SECTOR SET TO REBOUND

The Piker Signal for XLE or the Energy Sector is flagging oversold again and primed for a rebound. The last 2 signals were on 10/28 and 9/21, each of which saw a 3% rally in the sector of the next 3 days. Given XLE has taken a beating over the last 3 days, the chart also looks like its ready for a rally. There is strong support around 81-80 on the weekly and monthly charts and was a strong base for the sector. See the chart below. Overall the risk reward here looks good for another long entry keeping the stops below 80 and the target around 85.50- 86. We would keep adjust a stop above the 200 ema or 83.92 if it closed above this.

You can see in the highlighted green area that there strong base on the weekly chart within this 81-80 area. We saw something similiar with the Market when it hit its base and rallied.

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