The Energy Select Sector SPDR® Fund ( XLE ) has been battered, and it is starting to bruise.
With the price of crude now just hovering $43 per barrel, this exchange-traded fund ( ) is likely to get a whole lot cheaper.
This fund has support near-term because Wall Street is discounting recent events in the oil industry, as they did during the second-half of 2014. It also pays a dividend of 2.93 percent (SEC 30-day).
Thinking back, the Federal Reserve's call that lower gas prices (via lower oil ) was "unambiguously good" is striking a nerve with those laid of in the energy sector, which shed nearly 68,000 jobs last month alone.
With a technical perspective, the XLE has confirmed downside weakness with a close below the major support trend created on 2009's bottom.
The trend's momentum could weakening slightly as traders fish off the bottom, but the strength of the trend still remains quite strong - over 20 and a substantial divergence between +/-DMI.
Near-term range for XLE is $64.39 and $71.46, while a "relief" rally could spark buying up to $74.12; but, crude would have to play nicely.
If current price support breaks, XLE will trend lower within the disjointed angle (purple dotted line with grey shaded body), which represents widening .
Additionally, the "death cross" is close to completion on the weekly chart. This technical signal occurs when the 50-week moving average dips below the 200-week moving average.
At $43.27/bbl, crude is less than $2.00 about its inflation-adjusted price.
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