Technical Pulse: Energy Select SPDR Fund June 3, 2021 227

Energy Select Sector SPDR Fund (US: XLE) upside rebound since Q420 has been riding on the increased oil prices. Furthermore, multiple technical indicate that the stock can rally further:

 

  1. The ETF has not only breakout of the resistance zone at US$52.40-US$53.90, it also has broken out of the ascending triangle briefly and on Tuesday, the stock has broken out of the handle of the cup and handle formation.
  2. From another angle, the breaking out of the falling wedge in April 2021 confirms the bullish upside and despite facing pressure at the resistance zone, the correction was formed into a consolidative pennant, which indicate 1st a shortfall retracement and a bullish continuation pattern.
  3. From the Ichimoku indicator, the bullish candle on Tuesday 1st of June gap up above the Tenkan-Sen, which indicates a strong bullish signal. Furthermore, Senkou-Span A and B has is beginning to slope up and may move in parallel. All signals of the Ichimoku are pointing towards a bullish upside.

 

 

*Expected timeline of the trade is 10 weeks from the date of report issuance.

*Expect some minor pull back after prices reach between US$57.46-US$59.38.

 

CHART LEGEND

 

Ichimoku Kinko Hyo

Red dotted line = 9 Periods Tenkan-Sen

Blue dotted line = 26 periods Kijun-Sen

Green Line B= 52 periods Senkou Span B

Pink Line A = 26 periods Senkou Span A

Black line = 26 periods Chikou Span. Lagging line

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About the author

Profile photo of Chua Wei Ren

Chua Wei Ren
Technical Analyst
Phillip Securities Research Pte Ltd

Wei Ren specialises in Technical Analysis and has 11 years of experience in studying classic technical price action. He also study and research extensively on Elliott wave theory, Dow Theory. He believes that history plays an important role in how the market is reflected in the future.

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