Technical ANalysis of XLEDisclaimer: I don't own shares of XLE . This analysis is not a trading or investing recommendation & is only for educational purpose.
1. XLE has been going up slowly & steadily since Mar’20 after putting a bullish 1-2-3 pattern marked by the successful break of point#2 of the pattern.
2.In Jan 2022 price crossed a major downtrend resistance line (dotted line) that has been valid since July 2014.
3.Price then re-tested the resistance converted support in the week of 18-Jan-22 & failed to break the newly created support favoring the bulls.
4.Price then started moving higher on the back of massive volume & has been creating a higher high-higher low structure on the daily & weekly charts staying above 200 MA & 20 MA demonstrating a strong uptrend.
5. On the daily chart , price has been consolidating for the last couple of days above the 20 DMA & based on the strong uptrend currently in place, could take out the current consolidation resistance to move higher.
6. Price also seems to be following a channel giving an insight into potential channel support & resistance levels.
With January 2022 seeing massive bullish volume , price staying above the 20 & 200 period moving averages on the daily & weekly charts & on balance volume having broken its previous resistance on the daily chart from Nov’21, the energy sector XLE has all the right ingredients to go higher in the weeks to come, to the next resistance levels of $80 followed by $84 & $91.
All the best!
