This is an NFTRH+ update, but it is sent to the entire list because it is also a macro market update.
Last February we updated the NFTRH+ Energy sector trade. I took this for a good chunk of the initial surge that soon followed, but have mostly left the sector alone since then.
In the ensuing months XLE has been grinding along with an upward bias. In the long-ago update we noted that by the monthly chart the 75 area on XLE would bring on resistance and today’s OPEC news blitz has jerked XLV right up to that area. But the weekly chart says that XLE has created support at around 70 (tested just this week). What’s more, the weekly does not really show distinct resistance at 75. It’s more of a sloppy congestion area from 2014 and 2015.
One thing I don’t like is big media news hype, if you haven’t already guessed that. So I am not thrilled that XLE is making its move during the OPEC news week. But the chart is what it is and it says that 70 (+/-) is now key support that loads a target of 90 based on the measurement from the January low to the breakout point. Perhaps there could be more back testing of the support area, which could provide a better buying opportunity. But I wanted to present this latest view as a macro update along with a trade objective on XLE.
Buy Target: 70 preferred, but longer-term investors could position this week and add on any pullback.
Sell Target: 90
Stop Loss: A breakdown below 70, to suit risk tolerance but don’t hold below 67 unless a fundamental true believer.
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.