XLF daily - bounce from support, but more chance to drop next
XLF daily is forming two major patterns. Both are in their extreme. The bullish one is inverted Head and shoulder and the second is bearish and its rising wedge. Price did fall this week as we expected in the last analysis and did find support at 20 and 50 days MA and at the trend line and did bounce from those lines.
XLF is above all major MA which is bullish.
Volume is at 20 days average and does not confirm price action too much.
RSI is neutral at the moment but in case XLF continues to go up it will very likely form bearish divergences.
MACD histogram is, however, ticking lower while the MACD line and the signal line are very close to cross which would be very bearish.
Overall: XLF is closer to breaking the rising wedge and continuing to fall than to breaking out of the inverted Head and shoulder and going towards ATH. If XLF continues to go up will meet with resistance very fast at around 36 areas.
In case it falls below 20 and 50 days MA and this trend line, XLF will for sure drop very hard to at least to BigRed and then likely towards the red dotted line as the first major support.
XLF is above all major MA which is bullish.
Volume is at 20 days average and does not confirm price action too much.
RSI is neutral at the moment but in case XLF continues to go up it will very likely form bearish divergences.
MACD histogram is, however, ticking lower while the MACD line and the signal line are very close to cross which would be very bearish.
Overall: XLF is closer to breaking the rising wedge and continuing to fall than to breaking out of the inverted Head and shoulder and going towards ATH. If XLF continues to go up will meet with resistance very fast at around 36 areas.
In case it falls below 20 and 50 days MA and this trend line, XLF will for sure drop very hard to at least to BigRed and then likely towards the red dotted line as the first major support.
Consistency is the key of success....