NFTRH+; Energy Sector Updated

This NFTRH+ update is sent to the entire list as it has more general considerations than just as a trade.

Last year we began managing a ‘look ahead’ to XLE’s coming bottom (updating it in January: Future Buy Level Reminder), which we projected to be at the long-term secular bull market channel’s lower line (with wiggle room to the low 50s and long-term lateral support).  At the same time we also noted the first real resistance area, which is being approached right now.

So this update works to remind those who bought around the bottom that a projected resistance level is nearly at hand.  However…

xle monthly chart

On a daily view, XLE is breaking out.  The pattern measurement on this breakout is around 75, which also fits with the above noted resistance area.

xle daily chart

I noticed multiple sources highlighting this breakout today and I want to give some perspective on it.  It is breaking out by daily charts, but the monthly is still on the theme we began a year or so ago.  While it is certainly possible that resistance can be taken out easily, I want to temper the enthusiasm you may hear building out there.

It’s a breakout, and we sure do appear to be on the next leg of the secular bull market, but let’s just remember that a year ago we coldly viewed this resistance area as the first significant target.  The daily pattern has what it takes to get XLE there.  But given that the daily pattern measures to that area as well, that remains the target.

A reminder that chart based NFTRH+ updates are technical trade setup ideas, which may not be revisited as the buy, sell, stop parameters are already noted. They are meant as a starting point for further research if interested. I will not personally buy every item highlighted and will sometimes sell – without prior notice (because this takes time and resource away from NFTRH’s main functions) – any item that I do buy, below target, which is something I often do as a trader. Also please be aware that I am not a fundamental stock analyst. Due diligence is your responsibility.