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Another Healthy Pullback in Energy ETF?

Long
AMEX:XLE   SELECT SECTOR SPDR TRUST ENERGY
Energy is the strongest sector this year, but is down in the last month. Is it time to buy the pullback?

This chart of the SPDR Energy ETF has some interesting patterns. First are the candlesticks from March 23 and 25: an inverted hammer and then a normal hammer . Both of these are bottoming patterns, which were confirmed when prices bounced in following sessions.

Next, notice XLE’s tight range as it holds $49. That level is also interesting because it was the weekly low immediately after another bounce in early March.

Third, consider the peak around $54 last month. That matched the close on February 21, 2020, immediately before the coronavirus crash. It’s not a surprise that level would offer resistance after XLE doubled from the lows.

But now the sector could make another stab at a breakout – especially as travel resumes in coming months. Cruise and airline restrictions have already been eased. Memorial Day’s on May 31. Just two weeks after that, California reopens fully.

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Comments

Head and Shoulders risk?
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BrokenTypewriter dtingbudong
@dtingbudong, I agree. It's heading down more. If it breaks the neckline at $47 which is where the 50MA is, I can see it drop down to $39 which is at a fib retracement level and at major support.
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