XLE Hits Price Target After Buy Signal But Downside Pressure Remains

On November 9th, XLE hit oversold and we stated our price target was 3.5% higher at 85.50, which hit nicely today and then retreated. We even noted XOM would hit its price target at 105. The last 3 signals form XLE has produced a nice small win with a 3% gain. Sign up for the signals and make sure you don’t miss the next Energy Trade

Next Stop:

You can see from our trend indicator below, that XLE short-term is bullish but that the intermediate trend and longer-term trend is bearish. It’s best to take a pause on the long side with XLE coming up against its longer term trendline. WIth no edge from our signal, one has to respect the larger trend and anticipate further downside. t doesn’t give us a reason to short, instead we rather play buy the dips here when we get a signal.

Bull’s CASE

  • Support at 82-80 and on the weekly chart
  • Simple Pullback from run up
  • Dividend yields
  • Geopolitical events-maybe?
  • Short-term trend chat

Bear’s Case

  • Hitting Downtrend
  • Breadth is bearish longer-term
  • Inflation down
  • Energy prices declining

When we look at the two plays here, the bears seem to have the upper hand with a decrease in energy cost and the more defined trend. You can short into this trend but we rather watch and play the boucnes, we know the signal has been accurate and will continue to be.

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