Are you looking for investment opportunities in the energy sector? The Energy Select Sector SPDR ETF (XLE) has been the worst performing sector ETF in September and is also lagging year-to-date. However, don’t let this discourage you from exploring potential trades in this sector.
At Extreme Investor Network, we understand the importance of identifying opportunities in underperforming sectors. While many investors may be quick to dismiss XLE, our analysis suggests that momentum could be turning positive for this ETF and its holdings.
Looking at the daily chart, XLE has been stuck in a downtrend since March, but recent developments indicate a potential trend reversal. By analyzing historical trends and key technical indicators like the 14-day RSI, we can better assess the likelihood of a breakout in the near future.
Zooming out, we observe a multi-year uptrend in XLE, with higher lows consistently forming since the lows of 2020. This pattern suggests that buying weakness in an uptrend has historically been a successful strategy, increasing our confidence in the potential for a rebound in XLE.
Moreover, the long-term view reveals a possible two-decade breakout scenario for XLE, with a significant resistance level between $90 and $100. If XLE can surpass this range, it could signal a major breakout to new highs, attracting the attention of investors seeking opportunities in the energy sector.
At Extreme Investor Network, we provide unique insights and analysis to help you navigate the complexities of the market and uncover hidden gems in sectors that may be overlooked by others. Stay ahead of the curve and explore potential investment opportunities with us.
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