I’m on vacation this week, so I likely won’t be trading much…..it’s mega earnings week anyway, so that would’ve been true regardless of my location/vacation status….but when I have time, let’s take a look at some specific stocks here and see if we can’t find some analysis that helps.
Daily
LOG SCALE. After hitting channel bottom, XLE seemingly rebounded here just about into a previous daily demand level which is seemingly now acting as resistance. Red trendline (shown in second image) also has some reaction off of it, and if we’re to believe that it’s reliable (for now), it rejected off of this too. Move represents ~ 10% jump from channel bottom, daily now looking like a chop scenario.
Weekly
XLE broke out of its channel the first week of Jan 2022. Incredible run. It is seemingly now retracing back to test previous levels before deciding what to do. If we believe the orange trendline, although it appears like a very weak signal and not something I would trade, XLE recovered after testing below it this week. Red trendline could also potentially be in play here but no real strong signals on the weekly that I would use to trade and this recovery could be setting itself up for an evening starish or shooting starish reversal pattern. Something to keep an eye on.
Weekly demand level finds itself at around $55ish and I wouldn’t be surprised to see it want to test that at some point this year baring any sort of black swan event.
Monthly
Here’s where XLE gets a little suspect. After closing a bearish engulfing candle last month, it is seemingly trying to push back and close itself with a potential reversal hammer. This is why we look at multiple timeframes instead of just a singular indicator. There is still an entire trading week left in the month, so entry now, without confirmation, would be a gamble in my opinion.
Overall Thoughts
No real clear direction here….NOT factoring in Macro “news” and “trends” about receding commodity prices and the “potential” that this is the “peak of inflation” (we don’t trade the news just the charts, right?)….I don’t see anything but potential CHOP on the daily, indecision on the weekly, and “the easiest path is down” on the monthly (to test the $55 level). Anything, in my opinion, surrounding energy without it hitting technical levels right now is a complete gamble.
