XLE breaks below Thursday's low
Energy Select Sector SPDR Fund (XLE) Technical Analysis Report for Mar 27, 2020 | by Techniquant Editorial Team
XLE ended the week 9.55% higher at 28.33 after losing $2.06 (-6.78%) today. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 28.57, the ETF confirmed its breakout through the prior session low after trading up to $0.41 below it intraday.
Daily Candlestick Chart (XLE as at Mar 27, 2020):
Friday's trading range has been $1.05 (3.61%), that's far below the last trading month's daily average range of $2.44. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for XLE.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Black Candle showed up on Monday, XLE actually gained 16.04% on the following trading day.
After having been unable to move lower than 28.57 in the previous session, the market found buyers again around the same price level today at 28.16.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Down Move" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for XLE. Out of 297 times, XLE closed higher 54.21% 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 eight trading days, showing a win rate of 55.22% with an average market move of 0.27%.