XLE trade still in play
I added a little bit to my XLE position today as the $70 area has again proven to be pretty decent support. I think within the next couple of days this trade is either going to start producing a profit or I’ll get stopped out as traders make up their mind as to whether or not they want to be in financials or commodities. I’ve currently got my stop set at about 69.40, just under the previous lows of the last few days. The XLE chart looks like it’s holding up down here so I’ll continue to add until I get stopped out. One thing to keep in mind is that the longer a stock chops around in one spot the more people will be in the trade at that price. This will make a move in either direction more powerful as time goes on. If the stock starts to move up, those who got in at 70 will start adding to their positions and we shouldn’t have any real resistance until 78 or 80. However, if the stock starts to roll over there are a lot of people with stops set just under $70 so watch out for some serious selling should we break 69 or so.
Tags: enery sector trade, oil trade, xle
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