XLY Short= Consumer Screwed??
Not bearish enough for long-term or intermediate longs to worry yet. But I am taking this short bet to hedge some of my longs in the portfolio. I am slowly scaling out of longs fully and starting to take tier 1-2 size short position in some sectors.
Risk-Reward is good if trade confirms. Stop is just around 1.30-1.50% away from entry. Target 1 around 50 day EMA and Target 2 around 100 day EMA which is in line with bottom support trendline of this rising wedge. (confirms the validity of this wedge for now).
It is important to note that this sector had a relatively weaker rebound on friday so it might not be as strong next week even if market rises.
*I have a small size short in XLY from $63.50 and I bought few Jan $64 puts.
Risk-Reward is good if trade confirms. Stop is just around 1.30-1.50% away from entry. Target 1 around 50 day EMA and Target 2 around 100 day EMA which is in line with bottom support trendline of this rising wedge. (confirms the validity of this wedge for now).
It is important to note that this sector had a relatively weaker rebound on friday so it might not be as strong next week even if market rises.
*I have a small size short in XLY from $63.50 and I bought few Jan $64 puts.