Energy ETF Slams Into Resistance
Energy has been the dominant sector this year, but it remains one of the worst performers over the long run. Now could be a time for the bears to make a stand.
This weekly chart of the SPDR Energy ETF highlights the $56 level:
Notice how it was a low in late 2018 and near the low in early 2016. Also notice the price consolidation in that zone immediately before coronavirus triggered a deeper crash. XLE returned to $56 in early June and has struggled since. Last week's tight spinning-top candlestick is also a potential reversal pattern.
Turning to the daily chart, we see a combination of bearish divergence on MACD and overbought conditions on stochastics.
Finally, the broader commodity space is under pressure. Copper’s having its worst week since March 2020. Precious metals and grains are also under pressure. It could only be a matter of time before the weakness spreads to crude oil.
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This weekly chart of the SPDR Energy ETF highlights the $56 level:
Notice how it was a low in late 2018 and near the low in early 2016. Also notice the price consolidation in that zone immediately before coronavirus triggered a deeper crash. XLE returned to $56 in early June and has struggled since. Last week's tight spinning-top candlestick is also a potential reversal pattern.
Turning to the daily chart, we see a combination of bearish divergence on MACD and overbought conditions on stochastics.
Finally, the broader commodity space is under pressure. Copper’s having its worst week since March 2020. Precious metals and grains are also under pressure. It could only be a matter of time before the weakness spreads to crude oil.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
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