XLE closes above its opening price after recovering from early selling pressure
Energy Select Sector SPDR Fund (XLE) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, XLE ended the month -4.81% lower at 36.03 after losing $0.17 (-0.47%) today. Trading up to $0.36 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on Monday, XLE actually lost -1.70% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (XLE as at Jul 31, 2020):
Friday's trading range has been $0.78 (2.19%), that's below the last trading month's daily average range of $1.06. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for XLE.
Prices are trading close to the key technical resistance level at 36.12 (R1).
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
As prices are trading close to July's low at 34.24, downside momentum could accelerate should the ETF mark new lows for the month.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bullish Intraday Reversal" stand out. Its common bullish interpretation has been confirmed for XLE. Out of 468 times, XLE closed higher 50.00% 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 four trading days, showing a win rate of 54.70% with an average market move of 0.02%.