I have traded crude futures and energy equities pretty well the last several months … here are the tweets I made back in late-June and in late July.
On August 15th, I started looking at where support could possibly come into play for crude and the XLE …
We are basically at my support targets now and so today I started to build swing long positions in XLE, shorting some of the 3x bear energy ETF (ERY). I also sold some $61 October puts in XLE to try and earn some income or at worst, get a better price on my XLE position.
Crude Oil Futures – 240 Minute Chart
My target for crude was for support to be found between the 50% and 61.8% Fibonacci retracement levels … we hit that area and since I can see 3-waves lower into this support zone, I think it is time to start looking at building longs.
Crude Oil Futures – 60 Minute Chart
The 3rd leg down on the 240-min chart actually completed 3-waves into today’s low on the 60-min chart … we may have made a bottom in crude oil here for the next little while.
S&P Energy ETF (XLE) – Daily Chart #1
As my earlier posts noted, I was looking for the XLE to get down and possibly find support at the lower parallel line of the broadening pattern … price hit that level and then tried to make another test today but instead, could have actually made a higher low.
S&P Energy ETF (XLE) – Daily Chart #2
The above daily chart is a closer look at the possible bottom in the XLE … if support is found near here, traders could look at the median line of about $75.
Not only is crude looking like it could support energy equities here, natural gas is also looking like it wants to make an expansion move higher …
Natural Gas Futures – Weekly Chart
That huge downtrend from late-2013 had price falling from over $6/mcf to below $2/mcf. The bounce off of that sub-$2 price saw price bounce higher through-out 2016 … price has been consolidating that initial move off of the 2016 low for all of 2017 so far. There are a ton of yellow candles warning traders of a contraction phase … expansion phases follow contraction phases so I am looking for the remainder of 2017 and possibly 2018 being bullish periods for Natural Gas. If NG gets going here, oil won’t have to do all the heavy lifting to get the XLE ETF moving higher.
Natural Gas Futures – Daily Chart
Price is coiling here right below the $3/mcf level …
The above list contains the components of the XLE Energy ETF … I generally like to swing trade the XLE and day trade the individual equities while I’m focusing on energy stocks.
Bottom Line … everyone thinks that energy commodities and equities are heading lower. I think the majority of traders are going to be surprised here soon, and some good money can be made getting long energy commodities and equities.
Cheers … Leaf_West