XLB Skew - Bearish Sentiment
XLBSubmit 46.45-0.05 (-0.1%)Materials Select Sector SPDR
Traders are pricing in a larger-than-average implied volatility premium to buy downside puts relative to upside calls. Currently, the downside puts are trading at a +36.1% premium to upside calls, but the 52-week average is +28.5%. This suggests that traders believe there is more...
XLB trades within uncertain territory both on macro and micro basis.
On long term perspective price has failed its 10 and 5 year trends, and now trades between 2 macro levels - the 5-year mean at 41.50 and the 10-year uptrend border at 46.50.
On short term perspective price also showing no particular trend - XLB is trading within 1st standard deviations from...
XLB broke below the 8-month rising trendline support to reinforce the triangle top breakdown. The next support rests at 49.80 (June 9, 2015) and then 49.45 (200 day moving average). Below there would open 48.39 (March 26, 2015). It would take strength back above 50.60 (June 11, 2015) to stabilize and lift for 51.78 (May 8, 2015) near the triangle top resistance...
XLB has been holding a 6-month rising trendline (from October 13, 2014 low). If bulls manage to reclaim 50.38 (April 13, 2015 range high), that would suggest there is scope for further bullish momentum towards 51.01 (November 17, 2014 range peak) ahead of 52.22 (February 23, 2015 YTD high). The 49.38/48.59 support zone (which houses the the rising trendline) needs...
XLB just closed above a diagonal trendilne, stochastic, CCI and DMI are all moving up. The Risk/Reward Ratio is 2. I'm predicting a target price of $50.76 with a stop at $48.48
After XLB broke the uptrend channel in early Oct, price has been engaged in symmetrical triangle consolidation pattern.
A break down would be for the bears while an upper breakout could see price re-test the undercut of uptrend channel.
I have a hunch that it is going to be red channel moving ahead.
P.S. I noticed one false breakout above the upper triangle line...
