Normally I would not micro manage a fledgling trend line break like this, but I know a lot of subscribers are interested in the Energy sector, so here it is.
XLE broke above the SMA 50 (blue) yesterday on volume, and is trying to break the channel’s top trend line today, after dropping in-day to test the SMA 50. The first resistance area is shaded. A successful breakout would target the 38% Fib and/or the down-turning SMA 200 (black). The pattern theoretically measures to, yup, 69.50.
Using our standard chart, the sector does not look compelling to me. At least not yet. But given that there will likely be some bullish noise (I’ve already seen some out there) due to this would-be breakout, I thought I’d put out some perspective. The key is for XLE to hold the SMA 50 and for some of the sector’s heavyweights to start chipping in.