Energy ETF May Be Squeezing Toward a Breakout
Crude oil and natural gas are rallying this week as traders focus on tighter supplies and the potential for a winter demand spike. It may create an opportunity in the SPDR Energy Fund, which has been left for dead despite the move in physical products.
Notice the convergence between the rising 200-day simple moving average (SMA) and the declining 50-day SMA. This creates the potential for a breakout.
Next, consider the lows of July 19, August 19 and September 9. These have formed a rounded bottom with support increasingly close to the downward-sloping trend line along the recent highs.
Third, XLE's MACD has been steadily rising during this entire consolidation phase.
Finally, the 8-day exponential moving average (EMA) has just crossed above the 21-day EMA. That could potentially indicate that short-term momentum is turning more bullish.
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Notice the convergence between the rising 200-day simple moving average (SMA) and the declining 50-day SMA. This creates the potential for a breakout.
Next, consider the lows of July 19, August 19 and September 9. These have formed a rounded bottom with support increasingly close to the downward-sloping trend line along the recent highs.
Third, XLE's MACD has been steadily rising during this entire consolidation phase.
Finally, the 8-day exponential moving average (EMA) has just crossed above the 21-day EMA. That could potentially indicate that short-term momentum is turning more bullish.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
