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Energy Stocks of XLE Remain Bullish in the Near Term


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Energy Stocks of XLE Remain Bullish in the Near Term

The Energy Sector ETF, XLE, remains bullish in the near term. From the lows of $53.25 on 12/24/2018 we are charting a zigzag Elliott wave pattern. The target to the upside is $72.25 while the $61.30 low of 1/23/2019 holds.

The Model of the Elliott Wave Pattern

5-3-5 Correction

5-3-5 ZigZag Pattern

ZigZag patterns always subdivide into three waves. In the chart above these waves are labeled (A) (B) (C). Waves (A) and (C) always subdivide or downgrade into an impulsive 5 wave structure or a motive diagonal structure. Wave (B) can subdivide into any corrective structure, but must never move beyond the origin of the entire structure. Or, in other words, wave (B) cannot go below the start of the (A) wave in the chart above.

It is common to see the length of wave (A) in a zigzag equal to the length of wave (C). We call this relationsip a measured move or equal legs. Moreover we are using this common property of the zigzag structure to project a near term high in XLE.

Current 4Hr Chart of XLE
5-3-5 Pattern in XLE

XLE ZigZag

Using the same guidelines for the typical zigzag model we are now projecting an end to the current rally in XLE. With a typical relationship between waves (A) and (C) to be equal a trader can target a near term top in XLE at $72.25. The critical factor for this analysis to hold is prices remaining above the (B) wave low. So, while above $61.30 were looking for 5 subdivisions in (C) to the upside to reach our target.

To learn more about the Elliott wave structures check out our educational page. For a limited time were offering 25% off all educational products here. We also offer a free trial for 14 days to get to know our service before committing to any of our subscription plans.

To Your Success!

James

EWF Analytical Team



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Elliottwave-Forecast.com  (by EME PROCESSING AND CONSULTING LLC) was founded in 2005 by Eric Morera. Since inception our company has provided tailored Financial Market Services to thousands of clients.

ElliottWave-Forecast has built a reputation on accurate technical analysis and a winning attitude. By successfully incorporating the Elliott Wave Theory with Market Correlation, cycles, proprietary pivot system, we provide precise forecasts with up-to-date analysis for 42 instruments including FX majors, Gold, Silver, Copper, Oil, TNX and major Equity Indices. Our clients also have immediate access to our proprietary actionable trade setups, market overview, 1 Hour, 4 Hour, Daily & weekly wave counts. Weekend webinar, Live Screen Sharing Sessions, Daily Technical Videos, Educational Resources, and 24 Hour chat room where they are provided live updates and given answers to their questions.

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