bowtrix

Update on my XLE idea from earlier

Short
AMEX:XLE   SPDR Select Sector Fund - Energy Select Sector
Recently I said I am bearish on XLE and outlined many different reasons why that is. Now I have the chance to short it, and I'm risking a decent chunk on it because I have good conviction in this trade. Note that I decided against buying puts because the volatility premium is simply too high, and VIX is about to get crushed down.
Comment: My short might not fill. let's see
Comment:
Comment: I also noticed that for XLE, their dividends are down by a massive amount. In 2020 they were paying out 10% dividends which likely attracted this rally fueled by buy-and-hold investors who saw an ideal opportunity. But now, the dividend has fallen all the way to a meager 3%, which does not even beat inflation. This will add extra sell pressure.
Comment: Update: I stopped out on the short, but I bought puts expiring in 60 days at a strike price of $78

I'm still bearish, even more so.

Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.