XLB is just now ticking off of its all-time highs on the reflationary joy fest that has engaged this summer. In doing so it has left numerous gaps down below. Considering that the reflation is in at least some question (with copper, silver/gold, TSX-V strenuously overbought and at targets) and that I still have long positions, I thought it was a good time to try another short (after a successful short earlier in the rally).
The first support comes into play in the 58-59 area, but stronger support is at 55-57. The most recent rally phase is on declining volume and there is an RSI divergence. Be aware too that the post-March uptrend is completely intact (Captain Obvious).
This is as much a play on the macro as on the chart. Maybe more. If the macro does not swing against the various reflation plays this will not work out and the short will be covered promptly. But if it does pivot away from reflation XLB could go on a downside gap filling expedition.
A reminder that chart based NFTRH+ updates are technical trade setup ideas, which may not be revisited as the technical parameters are already noted. These updates are meant as a starting point for your further research if interested. I will not personally buy every item highlighted and will sometimes sell (ref. Trade Log) any item that I do buy below target (assuming I’ve not stopped out or sold for some other reason) as I often do. Also please be aware that I am not a fundamental stock analyst. Due diligence is your responsibility.