XLE's streak of five consecutive losing weeks came to an end this week with a .79% gain and an equally important "hammer". The hammer
candle in the attached chart is a potential bullish
reversal candle that requires confirmation. As a coincident indicator we use the "overbought/oversold" Williams %R
indicator. An overbought condition is bullish
for the ETF
conditions can remain so for extended periods of time. Prior reversals have coincided with a small dip of the Williams %R
below overbought and then a sharp reversal back to overbought. If next week is positive for XLE
we can consider this reversal confirmed and higher prices ahead.