XLE – Long opportunity?

Well, my TREND1 and MOMO1 strategies have really been taking it on the chin the past few days – this is to be expected as they are so heavily in commodities. But looking at a few charts, I think we might see a reversal – OIL has an RSI of around 7, DIG is even lower at around 3. But what really has me interested tonight is a chart I created of the Bullish Percent Index for the components of XLE. It is now down to about 3% – near a historic low. Usually this means you’ll get a reversal. Here’s a chart:

And here’s the corresponding chart from Stockcharts.com of their $BPENER symbol:

Pretty damn compelling in my mind – I’ll be looking at going long DIG in the morning and possibly XLE, XES and/or XOP – all the charts look about the same.

Advertisements