I have decided to release a Trade of the Day alert that I wrote for Friday trading to the public. When an uptrend starts his ascent is full of energy, and the birth of a new bull is by far the easiest part in our trading business. Enjoy!

 

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Dear GUNNER24 Traders,

 

The 1:3 Trade: Buy XLE ETF at 65.25 

 

Our 1:3 trades are A) adjusted to a longer term, having a spacious stop-loss for the development not to be endangered and B) have to show a risk-reward ratio of more than 1:3.

 

The Energy Select Sector SPDR ETF (XLE) seeks to provide investment results that correspond generally to the price and yield performance of publicly traded equity securities of companies in the Energy Select Sector Index. The index includes securities of companies from the following industries: oil, gas and consumable fuels; and energy equipment and services.


There is evidence from the weekly charts of a decisive turn in the Energy Sector!


US Crude Oil:

 

 

The US Crude Oil continuous future contract succeeded in closing above its long-lasting bull market resistance, which is an elliptical shaped one. This "Dome" resistance brakes the week highs since the start of the bull market. "Dome" braked at current 2017 high and the subsequent small lower 2017 high and until recently at the red arrows.


Already for the whole year 2016, the "Dome" was major resistance threshold. This week candle is closing far above the "Dome", which is most strongest and nearest threshold in the yearly, thus printing first weekly close above the "Dome" in course of 2017!


Accordingly this week crude oil close delivers a strong buy candle = buy signal. It could be a major buy signal and if this week close is not a bull trap, within weeks the crude should test its 2017 top at 55$, afterwards perhaps advancing further into year-end for a serious backtest of the 2015 top environment at 60$-61$.


XLE:

 

 

This week high close blasts red-dashed main resistance, the "2017 Downtrend Line". This is a major buy signal in the weekly time frame!


Since 61.80$-downtrend low, achieved 3 candles ago, we observe higher highs, higher lows and higher week closings. That series along with the very bullish momentum readings and the ongoing overcoming of the 2017 main resistance is strong evidence that the 2017 downcycle/downtrend finally bottomed after a 37 week duration at 61.80$ and from there a first initial up impulse began.


XLE is impulsing upwards out of a weekly swing low that might be the final year 2017 low! This is very bullish for at least short-term. Now XLE is a strong buy.


My last XLE forecast has been some time back. On 05/24/2017 the downtrend count was at week # 23, XLF traded at 68$ than, and the ETF was expected to continue its orderly downtrend into the 34 Fib number step-sum. Activated price target for the downtrend was 63$:

 

 

Downtrend has begun at # 1 // final 2016 high (78.45$) which was made in course of December 2016. We`ve identified an "orderly" downtrend that is/was oriented to the 1st double arc 2017 main resistance that "just" should correct the 2016 rally by some degree. Prominent activated target for the 2017 downtrend was the 1*2 Support Angle, which is derived from important 2016 bear market bottom.


==> The updated weekly XLE chart together with the still properly working "textbook" 21 Candle up out of 2016 low show that the recent 2017 downtrend lows broke that important 1*2 Angle support on weekly closing base, setting up a bear trap:

 

 

As expected the downtrend was oriented to the falling 1st double arc resistance = 2017 main resistance until bottom was printed at red # 37-low. At 61.80$ low a first initial up impulse was triggered which is at week # 4.


The first weekly close below 1*2 Angle set the bear trap because afterwards downtrend bottomed finally. This week re-conquered the 1*2 Angle on closing base, finally confirming a bear trap. Short squeeze is underway and should continue for some more weeks. Past week candle was first close above 1st double arc 2017 main resistance. This was a first sign for the final trend change. This week follow through confirms that A) initial up impulse is unfolding, B) bears are trapped actually and C) XLE uptrend should continue for some more weeks.


==> Past week first close above the 1st was buy signal in the weekly time frame.


==> This week high close above the 1*2 Angle is subsequent GUNNER24 Buy Signal!


After such long-lasting downtrend oriented to the 34 Fib number the first up impulse usually has a 8 to 13 week duration! Means the time strongly hints to the outcome that XLE should/could test back next important yearly trail above the 1*2 Angle and this is the 71.50$ first square line horizontal.


==> 71.50$ first square line resistance is shortterm uptarget for the trade setup!


==> We should buy a dip, resp. backtest of as from now finally re-broken 1*2 Angle which resides near 65.25$ until end of September, so:


==> Please 1:3-buy XLE at 65.25$-weekly 1*2 Support Angle till end of September!


==> Please place the SL for the XLE-1:3-trade long attempt at 63.25$.


Risk = 2.00$. Potential reward = 6.25$. Risk-reward ratio 2.00/6.25 or 1:3.13


GUNNER24 Trade of the Day orders for 09/15/2017:


Market: Energy Select Sector SPDR ETF (XLE)


Orders: Buy-Limit at 65.25. Stop-Loss (SL) at 63.25. Shortterm uptarget at 71.50. Buy-Limit order valid till 09/29/2017.


Eduard


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Be prepared!

 

Eduard Altmann