XLC (Communications Sector) 1M, 3M, and 6M Technicals Outlook
XLC Overview - Communication Services: Companies engaged in the transmission of information, communication, and entertainment, including telecommunications, media, and entertainment companies.
Economic Cycle Sensitivity: Communication services companies are relatively stable and less sensitive to economic cycles. However, their performance can be influenced by changes in consumer behavior, technological advancements, and shifts in media consumption patterns.
Use the analysis of the entire sector on ALL key timeframes (D, W, M, 3M, 6M) with economic factors to make informed decisions for which stocks should be on your watchlist over the next 1,3 and 6 months from this specific sector. Follow price and use structure as confirmation to ensure you're always on the right side of the market.
Top 20 Communication Services Companies:
XLC - 6M:
The first 6 month candle of the year reversed from a demand zone and closed into a key resistance zone between 64.78 and 67.75, This resistance area was once support and broke below during the formation of the first 6 month candle of 2022.
Scenario 1: If the next 6 month candle is set to break back above resistance, watch for a higher low first that pulls back into the candle during the first few months of its formation, possibly down to 60.23. A bounce should occur on lower TFs to confirm upward movement then a RED 2 GREEN scenario where the candle turns bullish then continues up to break above resistance. Could see a candle close above resistance or you could see a candle close right below resistance with a wick above.
Scenario 2: If the next 6 month candle is set to reject, watch for a look above and fail of the high of the previous 6 month candle (maybe even peak above resistance) … GREEN 2 RED scenario. Another bearish possibility is an immediate breakdown. Which you can once again target 60.23.
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XLC - 3M:
The Q2, 3 month candle is at the same resistance as the 6 month’s. Volume has risen bullish on the last 2 quarter candles. This means XLC is currently bullish.
Scenario 1: If XLC is bullish, watch for the next 3 month candle to retrace at least 27.25 to 38.2% of the previous bull candle before making a move back above the previous 3 month candle then above the resistance area, creating a RED 2 GREEN scenario.
Scenario 2: If XLC if bearish the next 3 months, watch for a reject at the current resistance from the 6 month chart. This could look like another look above and fail scenario, resulting in a GREEN 2 RED candle formation. If this happens then look to target 60.23.
Scenario 3: XLC could also simply trade sideways over the next 6 months (similar to the Q4/3 month candle from 2022 at a major support before making the move up at the beginning of 2023) before making a big move to either direction.
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XLC - 1M:
On the 1 month chart of XLC, price has been consistently bullish over the last 4 months. Conversely, the volume has decreased consistently for each previously formed bullish 1 month candle leading up to this resistance area. This observation could further indicate a weakening bull trend. This doesn’t mean a new bearish trend could form but there may be less buying and more consolidation for a while before continuing upward or reversing. The market has to continue digesting the current state of the economy. Which is currently plagued with much uncertainty.
Scenario 1: If bearish, watch for price to break above the previous 1 month candle then break back below, hold, then continue downward. You could also watch for the next candle to reject the highs of the previous one before moving lower. Target the high of the 1 month candle before the previous one. This area could hold as a support. If not, a bearish 1 month candle that closes below the most recent one would indicate a possible trend change overall.
Scenario 2: If bullish, watch for price to either retrace part of the previous candle before moving above or it may have little to no retracement at all and just take off. Depending on how bullish price is moving forward. Although sideways on the weekly chart, the previous week’s chart is strong bull candle with rising volume and bouncing from an uptrend line.
Scenario 3: Again, the market moves in 3 phase, up down, or sideways. So if the next month’s price action is to remain at a stand still, if it will simply trade sideways within the previous months high and low price points. In confluence with this scenario, price is already trading sideways on the weekly chart for past 3 weeks. This may or may not continue, but if there is a break above the highs or lows of the weekly range, watch for a continuation in that respective direction. Wait for price to confirm first (don’t want to get faked out lol).
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NOTE: On all timeframes, price is holding above all key EMAs. Also, in confluence in with the major resistance area that XLC is sitting at, price is sitting at the 50% retracement level when using the fib to connect the ATH (all time highs) with the most recent swing low (higher low on the 1M and 3M charts). Lastly, These are all just hypothetical scenarios. The economic has the last say. Understand where we are in the economic cycle by monitoring all economic factors then make a sound judgement before investing into anything.
Economic Cycle Sensitivity: Communication services companies are relatively stable and less sensitive to economic cycles. However, their performance can be influenced by changes in consumer behavior, technological advancements, and shifts in media consumption patterns.
Use the analysis of the entire sector on ALL key timeframes (D, W, M, 3M, 6M) with economic factors to make informed decisions for which stocks should be on your watchlist over the next 1,3 and 6 months from this specific sector. Follow price and use structure as confirmation to ensure you're always on the right side of the market.
Top 20 Communication Services Companies:
- Alphabet Inc. (GOOGL)
- Facebook, Inc. (FB)
- Verizon Communications Inc. (VZ)
- AT&T Inc. (T)
- Comcast Corporation (CMCSA)
- Netflix, Inc. (NFLX)
- Walt Disney Company (DIS)
- Charter Communications, Inc. (CHTR)
- Tencent Holdings Limited (TCEHY)
- Twitter, Inc. (TWTR)
- DISH Network Corporation (DISH)
- Baidu, Inc. (BIDU)
- Activision Blizzard, Inc. (ATVI)
- Electronic Arts Inc. (EA)
- Spotify Technology S.A. (SPOT)
- Sony Group Corporation (SONY)
- NTT DOCOMO, Inc. (DCM)
- ViacomCBS Inc. (VIAC)
- Liberty Global plc (LBTYA)
- Snap Inc. (SNAP)
XLC - 6M:
The first 6 month candle of the year reversed from a demand zone and closed into a key resistance zone between 64.78 and 67.75, This resistance area was once support and broke below during the formation of the first 6 month candle of 2022.
Scenario 1: If the next 6 month candle is set to break back above resistance, watch for a higher low first that pulls back into the candle during the first few months of its formation, possibly down to 60.23. A bounce should occur on lower TFs to confirm upward movement then a RED 2 GREEN scenario where the candle turns bullish then continues up to break above resistance. Could see a candle close above resistance or you could see a candle close right below resistance with a wick above.
Scenario 2: If the next 6 month candle is set to reject, watch for a look above and fail of the high of the previous 6 month candle (maybe even peak above resistance) … GREEN 2 RED scenario. Another bearish possibility is an immediate breakdown. Which you can once again target 60.23.
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XLC - 3M:
The Q2, 3 month candle is at the same resistance as the 6 month’s. Volume has risen bullish on the last 2 quarter candles. This means XLC is currently bullish.
Scenario 1: If XLC is bullish, watch for the next 3 month candle to retrace at least 27.25 to 38.2% of the previous bull candle before making a move back above the previous 3 month candle then above the resistance area, creating a RED 2 GREEN scenario.
Scenario 2: If XLC if bearish the next 3 months, watch for a reject at the current resistance from the 6 month chart. This could look like another look above and fail scenario, resulting in a GREEN 2 RED candle formation. If this happens then look to target 60.23.
Scenario 3: XLC could also simply trade sideways over the next 6 months (similar to the Q4/3 month candle from 2022 at a major support before making the move up at the beginning of 2023) before making a big move to either direction.
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XLC - 1M:
On the 1 month chart of XLC, price has been consistently bullish over the last 4 months. Conversely, the volume has decreased consistently for each previously formed bullish 1 month candle leading up to this resistance area. This observation could further indicate a weakening bull trend. This doesn’t mean a new bearish trend could form but there may be less buying and more consolidation for a while before continuing upward or reversing. The market has to continue digesting the current state of the economy. Which is currently plagued with much uncertainty.
Scenario 1: If bearish, watch for price to break above the previous 1 month candle then break back below, hold, then continue downward. You could also watch for the next candle to reject the highs of the previous one before moving lower. Target the high of the 1 month candle before the previous one. This area could hold as a support. If not, a bearish 1 month candle that closes below the most recent one would indicate a possible trend change overall.
Scenario 2: If bullish, watch for price to either retrace part of the previous candle before moving above or it may have little to no retracement at all and just take off. Depending on how bullish price is moving forward. Although sideways on the weekly chart, the previous week’s chart is strong bull candle with rising volume and bouncing from an uptrend line.
Scenario 3: Again, the market moves in 3 phase, up down, or sideways. So if the next month’s price action is to remain at a stand still, if it will simply trade sideways within the previous months high and low price points. In confluence with this scenario, price is already trading sideways on the weekly chart for past 3 weeks. This may or may not continue, but if there is a break above the highs or lows of the weekly range, watch for a continuation in that respective direction. Wait for price to confirm first (don’t want to get faked out lol).
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NOTE: On all timeframes, price is holding above all key EMAs. Also, in confluence in with the major resistance area that XLC is sitting at, price is sitting at the 50% retracement level when using the fib to connect the ATH (all time highs) with the most recent swing low (higher low on the 1M and 3M charts). Lastly, These are all just hypothetical scenarios. The economic has the last say. Understand where we are in the economic cycle by monitoring all economic factors then make a sound judgement before investing into anything.
Trade active:
XLC attempting to break above the 3 candle week range that I boxed in. Watch a strong break and hold of this box with volume over next couple week, in addition to maintaining the uptrend. Could see a continuation to 67.77 then to the weekly supply area at 69.24-71.03.
Use these possible moves to select individual stocks that heavily weighted in this sector. Those would be the stocks driving these moves mostly and would be the one with the most trade opportunities.
Use these possible moves to select individual stocks that heavily weighted in this sector. Those would be the stocks driving these moves mostly and would be the one with the most trade opportunities.
Dennis Butler Jr.