The Energy Select Sector SPDR (ETF)(NYSEARCA:XLE) is a strong short in my opinion. This comes from pure technical analysis. First, the $XLE hit the daily 200 moving average, after surging since mid-August from under $62.00 to a high today of $68.90. This is a monster move in a very short time frame. Next, oil is trading in the upper range around $52.00. Just weeks ago it was near $45.00 at the low end of the range. This range has been active for most of 2017 and continues to hold. Next, the $XLE is pulling back off the daily 200 moving average forming a topping tail. Topping tails are great reversal signals. Off these factors, I alerted members to buy puts on the $XLE. I expect the price of the $XLE to fall to $66.00 – $66.50.
Today, leading biotechnology company Gilead Sciences Inc (NASDAQ:GILD) is trading lower by $2.24 to $81.62 a share. The stock is pulling back from an overbought condition on the charts. GILD stock put a recent high in the charts at $86.26 on September 8th. This tells me that the current decline in the stock should be just a minor fall. Traders and investors should watch the $75.50 – $76.00 level for major daily chart support. It should be noted that GILD stock broke out to the upside on August 30th around this area. This level should be a solid level for a bounce when it is retested.
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This morning, the leading consumer staples stocks are selling off sharply. Stocks such as Kimberly Clark Corp(NYSE:KMB), Procter & Gamble Co(NYSE:PG), Clorox Co(NYSE:CLX), and Colgate-Palmolive Company(NYSE:CL) remain under pressure since the opening bell. It should be noted that all of these stocks have struggled since late June. Many of these stocks are now nearing important support levels for a trade.
Kimberly Clark Corp(NYSE:KMB) is a leading consumer staple stock that is trading lower today. The stock has been selling off since June 26, 2017 when it traded as high as $134.29 a share. Since that pivot high the stock has plunged to $116.63 a share. Traders and investors should now watch the $115.00 level for major support. This is where the stock broke out in January 2017. Often, when a stock retests a break-out level it will serve as major support and be defended by the institutional money.
Many traders and investors are asking me if this is a good time to buy F5 Networks Inc (NASDAQ: FFIV). The simple answer is no! This stock has been declining since March when it traded as high as $149.50 a share. Today, FFIV stock is trading around $118.80 a share. Traders and investors should note that the stock has been forming a bearish consolidation pattern as it hovers along the weekly chart 200 period moving average. This chart formation will usually lead to lower price soon. Traders and investors that are looking to buy FFIV stock must now look at the $102.00 – $103.00 price area. This is where the institutional money defended the stock in March 2016 and will likely support it again when retested.