$XLE had a nice rally following a daily pattern completion on September. The price rallied strongly into the 70$ zone but was rejected by the daily downtrend line that is holding since September 2014.
Today, despite a red day in the stock markets, Energy is showing strength due to the rise in Oil prices.
The price is in a squeeze mode as it is ranges between the daily Fast and 50 lines.
Two scenarios for the near future:
1, - Will be triggered if the price will decline below the 50 line and below the zone - 65-66$
2. Potential breakout and a run towards the 61.8 Fib level and the major structure zone near 75$
If $XLE will break out of its , we should consider 75$ as a temporary setup back - potentially leading to a pullback that will allow a better entry for a longer term move in $XLE.
That is still to come.. just put a note in your notebooks for that longer term scenario.
Tomer, The MarketZone
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