XLE SP500 Energy Sector SPDRWhen doing my sector research, I noticed that the stochastic levels were decreasing. I like levels under 50% and this is currently at 24% today. The put to call ratio is under 1 sitting at 0.92 post-market which indicates that there are a tad bit more puts that were closed today versus yesterday which indicates that more calls are slowly entering the market. The energy market is due for a spike in my opinion as the economy is slowly recovering and demand is slowly increasing with talks of the infrastructure bill along increased oil demand as of late. The only thing worries me is the lack of unemployment growth and job acceptance compared to job growth which has been increasing.
As far as the chart itself, on the Daily timeframe I noticed that the RSI is in the "oversold" territory and the MACD just crossed over to the green territory which indicates a possible reversal soon to come. I've also noticed that "Support #1" has potentially been broken. I want to make sure my 4HR and 1HR time frames match to the daily regarding the RSI and MACD which it is pretty close in my opinion. Since "Support #1" has been broken, I went to the 4HR and 1HR to confirm in which I saw the Support #1 being broke through with strong bearish candles. This indicates that price could potentially begin testing "Support #2". I used the fibonnaci indicator to trace a potential retracement from and to the resistance and the support levels to create the discount price area and the target price area.
Before entering I want to see bullish candles in the discount zone on the 1HR timeframe!
I hope this give you some form of sentiment.
Thanks for the support!
