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XLE

Oil's analysis towards OPEC meeting (September 22nd)Oil is trading inside a weekly trading channel. The price is testing the bottom of the channel and a weekly uptrend line. The price was rejected by a weekly downtrend line Bearish Scenario - In case of a bearish breakdown, Oil can reach to the 61.8 Fib level to complete a bullish AB=CD pattern Bullish Scenario - In case of a bullish breakout, Oil will probably climb towards the top of the channel. More analysis? More Trading Scenarios? @themarketzone on Twitter/Facebook/Instagram
NYMEX:CL1!
by themarketzone
2
Head and Shoulders Vs. Bearish BatXLE is slowly making its way towards a very interesting weekly support zone - 60-62$ Notice that this price zone is the 61.8 Fibonacci level from 2009 low and from 2016. Also notice that it is the neckline of a weekly H&S pattern. If it will break, XLE can fall to 55$ and maybe even 50$ If it will hold as support, the extremely bullish scenario is that it will climb all the way up to complete a bearish Bat near 95$ Obviously it will have to re-test the MA lines as resistance levels first Agree or Disagree? It's Sunday.. you can read more about this setup and others in the newsletter #WeeklyMarketsAnalysis (search on Twitter)
AMEX:XLE
by themarketzone
5
Energy (D): GasolineThere are three if/else statements with this trade. If price fills the gap set on December 2nd and shows signs of buying, go long. Else, stay flat and wait. If price reaches purple region as indicated in chart, go short. Else, stay flat. If price reaches "Buy Here" level, buy there. - Odds are we will see some action in this trade as long as price does not gap beyond forecasted prices. Gas and oil essentially have a 1-1 positive correlation, so follow this asset for some clues/ indication on energy trajectory.
NYMEX:RB1!
by Lanmar
2
THE WEEK AHEAD: XOP/OIH/XLE, COSTPremium Selling For the umpteenth week in a row, there is little in the market for high quality premium selling plays. Screening for 52-week >70 implied volatility rank, you'll basically get one quality hit at the moment, and that is COST, which has dipped significantly on AMZN/WFM merger news. A few names are approaching that 70 mark, but they have earnings three to four weeks out; you might as well wait to put on volatility contraction plays around earnings announcements in those cases. I previously set out a nondirectional play in COST (see Post below) that I didn't enter, having been distracted by something or other; I may reconsider that play now that the market's had an opportunity to digest the AMZN news. Other names, such as NBR (petro, part of whose operations are deep water),* RAD (pharmacy in merger and acquisition with WBA), and BBRY (a kind of WTF, why are they still around) are too small in dollar value to be worth playing unless you dive in and go straight-on covered call or near-to-the-money short put. Directionals I've been waiting for several weeks to put on a bullish XOP, OIH, and XLE play. Each time I look at them, it appears that oil has trundled lower on rising rig count, total stock build, lackluster inventory draw, or a combination thereof. I've been primarily watching oil prices around the supposed average shale production break even at $40 to go long in one of these underlyings. We may be close enough for me to make a play, but I'll probably continue watching. Lower is better for either a net credit put diagonal or a Poor Man's Covered Call in these guys. Low Volatility Plays With VIX continuing on its sub-12 bender, there probably isn't a better time to go put-side low volatility strategy in broad index underlyings (SPY, IWM, QQQ, DIA) using either calendars, net credit put diagonals, or debit diagonals. These capitalize on volatility expansion and movement of the underlying toward the put side, ideally allowing you to exit the short put aspect of the setup at worthless and recapture any value left in the long at the expiry of the front-month short. Heck, the dam has to break at some point ... . * -- I regard most companies that rely substantially on deep water operations as largely doomed here. Most deep water operations require high per barrel prices that we haven't seen for a substantial period of time and aren't going to see in the short- to medium-term.
AMEX:XLE
by NaughtyPines
TRADE IDEA: XLE SEPT 15TH 57/JULY 21ST 67 PMCC** -- Poor Man's Covered Call. One of the few sectors that hasn't benefited from the post- November election run-up is XLE, so I'm looking to get into a bullish play here where price of the underlying is comparatively low. Here, I'm basically looking to emulate a full-on covered call using a deep in the money call in September to stand in for stock, 100 shares of which would be somewhat pricey here, comparatively speaking. A covered call with the same short call would cost 64.56 to put on; the Poor Man's shown here is far less than that. Additionally, if you're looking to acquire XLE shares at some point, the setup gives you the flexibility to reduce some cost basis up front before acquiring the shares, after which you can exercise the long call instead of being stuck with shares with a cost basis of 64.56/share here, as you would be with a covered call here. Unfortunately, as a form of diagonal, there aren't many metrics to look at, but this is what we do know about the setup: Max Loss/Buying Power Effect: 7.21 Delta: 61.59 Theta: .75 Generally, you work it like a covered call, rolling the short call out to reduce cost basis in the long aspect of the position. However, on break of the short call, your long call won't be subject to "call away" as it would be with stock; in that event, look to exit the trade profitably and redeploy or roll the short call up and out for a credit if you want to continue to reduce cost basis in the long through expiry. Notes: The pricing of the setup will probably be different during the regular NY session. I'm working with off hours quotes here, and the bid/ask on the back month is particularly wide here, so overall pricing of the setup may be inaccurate.
AMEX:XLELong
by NaughtyPines
THE WEEK AHEAD: PIVOT TO NON-HIGH VOLATILITY STRATEGIESWith this quarter's earnings season all but over and with VIX trundling along at sub-10 levels, there is a paucity of high implied volatility plays in the market for premium selling, so I'm looking at deploying something in either low volatility strategies (diagonals) or in directional plays that I've been eyeing. Screening for underlyings with greater than 70% implied volatility rank over the past 52 weeks, greater than 50% background implied volatility, and relatively high options liquidity yields a few names -- P, HTZ, and NBR, but it'll be tough to squeeze good premium out of these because they're all <$10 underlyings. I would be willing to get into exchange-traded funds if only there was one with >70% implied volatility rank and >35% implied volatility; there currently isn't. With the individual underlyings, a P 9 short straddle in the July 21st expiry yields 1.84 at the mid with BE's at 7.16 and 10.84 (put side, below expected move; call side, at expected move); a HTZ July 21st 10 short straddle yields 2.03 with BE's at 7.97 and 12.03 (both sides clear of the expected move); and the NBR July 21st 9 short straddle, 1.54, with BE's at the expected move on the put side and above it on the call (7.46/10.54). Alternatively, NBR is a petro play,* so I can see taking a bullish assumption on the underlying and short putting it, even though it won't pay all that much (the July 21st 8 put brings in .40 with a BE of 7.60). Directionally, I've got my eye on two sector exchange-traded funds: XLE and XRT. Out of all the sectors, energy and retail have been the most downtrodden, so this may be an opportunity to go long with comparatively "cheap" setups that have oodles of time to work out -- Poor Man's Covered Calls -- with long-dated back months several cycles out. I'll post setups on those separately; however, each time I look to pull the trigger on a bullish XLE setup, oil seems to trundle lower and XLE with it ... . * -- NBR is deepwater; if they're not in trouble now with oil sub-$50/bbl., they will be in trouble in short order if prices hang around here for long. Generally, BE for deepwater oil exploration and production is well above this year's $55/bbl. high, so I'm hesitant to take a bullish assumption on deep water anything. Frankly, I'd rather put my buying power to work on something like XOP, where I'm not exposed to single name risk in this area, given the fact that there are so many troubled companies in this sector.
AMEX:IWM
by NaughtyPines