XOP Is Taking A Break

A couple of weeks ago I looked at a technical pattern which had been formed on the Oil Services ETF (OIH) chart and wrote about bullish implications this pattern could have. Since then OIH gained 5% and the Energy sector remains the best performing market sector starting from June when the S&P 500 printed the interim low.


One of the Energy ETFs family - the Oil & Gas Exploration & Production ETF (XOP) – is trading within a range over the last month and lagging the Energy sector ETF (XLE). The XOP:XLE ratio reached one of the lowest readings since 2010 (the upper indicator window). Rising Oil prices will most likely help XOP to start outperforming XLE again.

Meanwhile, XOP is forming an Ascending Triangle on the daily chart with the price objective around 57 in case of the upward breakout. RSI should break through its declining trendline as a confirmation of the price breakout out of the Ascending Triangle.A couple of weeks ago I looked at a technical pattern which had been formed on the Oil Services ETF (OIH) chart and wrote about bullish implications this pattern could have. Since then OIH gained 5% and the Energy sector remains the best performing market sector starting from June when the S&P 500 printed the interim low.


On the short-term P&F chart the price reversed its short-term downtrend in July and issued a Triple Top buy signal (green box). Immediately after that the price pulled back into the pattern but didn't issue a new sell signal thus building a foundation for a stronger Bullish Catapult pattern. This pattern will be formed if the price reaches 53. With a break below 49.5 a reassessment of this short-term consolidation pattern will be needed. The vertical count from the June low points to 58 as a potential price target.

On the intermediate-term P&F chart we see that the descending Bearish Resistance line is breached. However, there is still no a new buy signal confirming this breakout. An extension of the last column of Xs to 53 will give a Triple Top buy signal and validate the trend reversal. The vertical count from the June low gives a price objective at 57. More significance to this level is given by the fact that it's the level of strong previous resistance.

Disclaimer: I express only my personal opinion on the market and do not provide any trading or financial advice (see Disclaimer on my site).