XLE still stuck within tight trading range
Energy Select Sector SPDR Fund (XLE) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, XLE ended the month -2.4% lower at 37.83 after gaining $0.83 (2.24%) today. Closing above Monday's high at 37.32, the ETF confirmed its breakout through the previous session high after trading up to $0.75 above it intraday.
Daily Candlestick Chart (XLE as at Jun 30, 2020):
Tuesday's trading range has been $1.76 (4.8%), that's slightly above the last trading month's daily average range of $1.51. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for XLE. Prices continued to consolidate within a tight trading range between 36.31 and 38.69 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. Additionally, one bullish candlestick pattern matches today's price action, the White Candle. The last time a White Candle showed up on June 25th, XLE actually lost -3.46% on the following trading day.
Prices are trading close to the key technical resistance level at 38.80 (R1). The market was bought again around 36.31 after having seen lows at 36.44, 36.34 and 36.57 in the last three trading sessions. Obviously there is something going on at that level.
XLE shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Outside Bar" stand out. Its common bullish interpretation has been confirmed for XLE. Out of 87 times, XLE closed higher 56.32% 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 55.17% with an average market move of 0.39%.