patterntrader

XLU Utilities fund: Waiting for a structural breakdown

Short
AMEX:XLU   SELECT SECTOR SPDR TRUST
XLU is a massive, highly liquid fund that only invests in utility companies that are included in the S&P 500 . It is one among the cheapest and most liquid options. I am expecting a structural break down. Will only enter if the relative upward strength or the volume of the pair runs out. I have identified the same structure on RSI below. Have a look.

Comments

Nice idea patterntrader, seems probable. Previous support and resistance show up a lot at the $49- 49.74 area, once the pull back happens around there I think this will turn out to be a fine trade. Right now thou I believe this fund has potential to the upside- $52.80 if it doesn't get stop at the 49 area. This fund has drop 10% since the macd went negative and now has a chance to do the same to the upside with dec 29 close above 20 ma pullback red candle close and macd being positive.
+1 Reply
patterntrader andhughwho
@andhughwho, Good suggestion! In my case, I won´t enter until the pair gets out of the correction area. Oftentimes, 200 SMA remain as a strong cap. Let us follow how it will turn out!
Thank you for your comment!
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