I came across an interesting pattern on consumer staples ETF (XLP).
The pattern is a channel spanning almost 9 years. The pattern is well tested and respected (7 reversals on the lower bound, 6 reversals on the upper bound)
Over the past two years, the ETF has consolidated gaining only 2% per year. Despite the consolidation, the ETF has an annual return of 22% for the past 9 years!
today we saw the price break and close above the previous weekly high, a bullish sign.
I love this trade because of the long-term price action and minimal risk.
my stop loss is at $54.02 (6.7% risk).
Economically speaking this space is extremely sound as consumers buy these products no matter the economic landscape. As shown by the price action this space offers slow and steady growth, due to the low elasticity and constant demand.
The pattern is a channel spanning almost 9 years. The pattern is well tested and respected (7 reversals on the lower bound, 6 reversals on the upper bound)
Over the past two years, the ETF has consolidated gaining only 2% per year. Despite the consolidation, the ETF has an annual return of 22% for the past 9 years!
today we saw the price break and close above the previous weekly high, a bullish sign.
I love this trade because of the long-term price action and minimal risk.
my stop loss is at $54.02 (6.7% risk).
Economically speaking this space is extremely sound as consumers buy these products no matter the economic landscape. As shown by the price action this space offers slow and steady growth, due to the low elasticity and constant demand.