Investing.com - Financial Markets Worldwide

XLE Is Looking Bearish

Published 03/26/2012, 02:23 AM
Updated 07/09/2023, 06:31 AM

The XLE’s Head and Shoulders pattern is confirmed for its target of $68.
XLE CHART
It will be interesting to see whether this pattern turns officially complex by closing the gap created last Thursday to trade to about $73 and something that would create an outer right shoulder. Should this prove true, it will create a bigger bearish pattern that will confirm at $71.15 for a target of about $66 so long as the XLE then turns back down.

Considering that its multi-touch Rising Wedge shown below in weekly form is confirmed for its target of about $55 right now, it provides good reason to believe that either of these two H&S variations will take hold to take the XLE down.
XLE CHART 2
However, as can be seen in the chart above, there is a decent chance that this pattern goes or a higher apex near $80 and so continued confirmation is key on the first H&S at $72.72 and then on the larger pattern should it blossom at $71.15.

Ultimately, though, just as either H&S should take the XLE down so too should either Rising Wedge variation and this is one more reason that XLE is looking bearish.

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