XLE a W3 BO of 2GANN FAN lines+wedge move or a bulltrap to W4?
XLE formed a big H&S pattern in 2002 & has since bottomed during pandemic. From there, it started a blue rising wedge which had a more chance of breaking down. However, due to the Russian invasion, it broke to the upside above the H&S green neckline.. Measuring the height of this wedge gives a target of 82.40 which XLE had reached & recently exceeded. It also exceeded 2 GANN FAN lines from 2002 & 2020 lows but registered a big red candle the next day.
I think XLE is currently at an impulse wave 3 of 3. XLE must hold 79 for wave 3 to continue higher. Losing 79 may signal a corrective wave 4 of 3 back down to retest the wedge at near the 68 level before a wave 5 0f 3 starts. It may even retest the green H&S neckline started in 2002 approximately near the 66 level.
Supports at 79, 68 & 66.
Resistances at 88 (1.618 Fib) & 92.24(2.0 Fib of recent wave b in a zigzag move)
There is better chance of XLE holding 79 with wave 4 & do the last wave 5 of 3 as the world energy crisis is not abading in the near future. XLE is the ultimate winning sector for months.
Not trading advice
I think XLE is currently at an impulse wave 3 of 3. XLE must hold 79 for wave 3 to continue higher. Losing 79 may signal a corrective wave 4 of 3 back down to retest the wedge at near the 68 level before a wave 5 0f 3 starts. It may even retest the green H&S neckline started in 2002 approximately near the 66 level.
Supports at 79, 68 & 66.
Resistances at 88 (1.618 Fib) & 92.24(2.0 Fib of recent wave b in a zigzag move)
There is better chance of XLE holding 79 with wave 4 & do the last wave 5 of 3 as the world energy crisis is not abading in the near future. XLE is the ultimate winning sector for months.
Not trading advice
Comment:
Pls forgive me for the error. The measured move of the wedge BO should be 82.40 & not 85 as shown in the chart. Watch out for the 79 to hold as it is a stronger & a far more obvious support that many will be waiting to buy on bounce.