XOP has been in a bear market since late March. Bottomed out at 72.35 which is a Fib retracement level. It's been consolidating at 75.50 and has just built a bull flag on the 30min.
Indicators are turning bullish (MACD, Stoch, RSI)
Confirmation would be a break above the purple trendline. Retest from the top and a bounce upward.
Resistance will be the 50 SMA on the daily which is $82.
On a larger scale, this could be a cup and handle formation.
Bear scenario would be if price fails on the retest of the trendline and a continuation of the bear market for XOP.
Indicators are turning bullish (MACD, Stoch, RSI)
Confirmation would be a break above the purple trendline. Retest from the top and a bounce upward.
Resistance will be the 50 SMA on the daily which is $82.
On a larger scale, this could be a cup and handle formation.
Bear scenario would be if price fails on the retest of the trendline and a continuation of the bear market for XOP.
Comment:
XOP heading higher but may face resistance at $91. I expect a pullback to form a cup and handle before heading higher. BTW it's also part of a much bigger cup and handle that dates back to before the pandemic at around $97. It's closed above and is finding support on the 50SMA on the daily and indicators look good.
Comment:
XOP is doing well but I anticipate more choppiness ahead. If XOP is able to break through $91, there's a major resistance level at $95. As I mentioned it's part of what looks like a cup and handle. Oil is an inflation trade so I expect this to keep going up.
Comment:
It's been a great run but the run may come to a short term end. There are a few things that are coming into play. The 200 SMA on the weekly chart is at around 104 that will act as resistance. The indicators on the daily are overbought. Price has become extended from the 20SMA. This is wave 5 of an Elliott wave and so I expect an ABC corrective wave for a pullback. I'll move my stop losses up tight for any major corrections. Long term I'm still bullish on XOP, but there needs to be some correction before heading higher.
Comment:
XOP hit the 1.618 Fib extension today from this impulse wave. It even hit 100 before reversing. This looks like it could be completing wave 5 of an Elliott impulse wave up. RSI on the hourly has been diverging lately. I'm still looking for 104 and If it does reverse, I'm watching to see if the gap can be filled at 89 which is also where the 20SMA. Another support level is 86.5 which is it's point of control.
Trade closed: stop reached:
XOP double topped at 100. My trailing stop kicked in and I will watch the pullback. It broke it's trendline. I will setup another trade idea as I monitor the retracement.