XLE closes within previous day's range
Energy Select Sector SPDR Fund (XLE) Technical Analysis Report for Oct 12, 2018
XLE finished the week -5.44% lower at 72.96 after gaining $0.16 (0.22%) today on high volume. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (XLE as at Oct 12, 2018):
Friday's trading range has been $1.84 (2.5%), that's far above the last trading month's daily average range of $1.04. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for XLE.
Prices are trading close to the key technical support level at 71.78 (S1). Prices are trading close to the key technical resistance level at 73.14 (R1).
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day while could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 75.83.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Trading close to August's low at 71.70 we could see further downside momentum if potential sell stops at the level get activated.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for XLE. Out of 145 times, XLE closed higher 55.86% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 55.86% with an average market move of 0.65%.