Medium term
Trade view / 13 July 2016 at 8:12 GMT

Bullish breakout in energy ETF


We have identified the possibility of the Energy ETF XLE:arcx being in a fifth and final advance off the lows set back in January before. The question was if the wave was going to be a short one or if it was set to extend; it appears as though it is going for an extension.

The XLE has now fulfilled the requirement for a breakout trade set up as it has closed above the key $69 pivot after the key date of July 4, following the price extreme on July 1. Time cycles are now signaling higher prices into July 18 and if it continues higher from there, August 9 and possibly even September 8. 

From a price perspective, we now have resistance at $73, $77 and $81. Support is found at the $69 and $66 levels.

Management and risk description

The plan is to buy the XLE:arcx above $69 aiming higher into the $73 and $77 levels. The stop can initially be placed at the $66 level. 

Fifth waves are tricky in the sense that they are often either short or long, sluggish or strong and explosive. We should have been able to rule out the short alternative, but it could still be a sluggish one. The main risk to this trade view, however, is a weak oil price and general stock market weakness which would most likely weigh on this ETF as well.


Entry: buy above $69.

Stop: $66.

Target: $73 and $77.

Time horizon: one to four weeks.

XLE:arcx daily chart:
XLE:arcx daily chart

Create your own charts with SaxoTraderGO click here to learn more

Source: Saxo Bank 

XLE:arcx daily development chart:
XLE:arcx daily development chart
Source: Saxo Bank 

— Edited by Michael McKenna

For more on ETFs click here.

Non-independent investment research disclaimer applies. Read more
13 July
charitymemae charitymemae
This comment has been redacted
29 July
Johan Berntorp Johan Berntorp
I have had to change the count on this one due to recent price action. This is similar to LUPE:xome and is now in a zone time wise for a reversal higher. 3-3-5 pattern, which is complete should transpire into a substantial move higher. The risk is however this wave lower, following a bounce extends lower. In any case the stop and parameters are about correct anyway, we could have gotten a better entry though.


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail