Highlights:

  1. XLE and USO both ETFs are in the uptrend and strongly bullish
  2. XLE etf broke all the Major Moving averages and USO oil broke also major moving average except 200 Simple moving Average
  3. XLE ETF’s MACD shows divergence and XLE is currently holding above the upper band of Bollinger

 

Oil was big concern for current bull market as oil price was too low for producers to cover their oil production cost and supply of oil was higher than the demand in the market. Scenario has changed recently. Now oil etf looks bullish and most of the oil etfs recovered from its downtrend. Some of the ETFs made strong base for the next move and some etfs already started its upward move.

USO :

Oil ETF USO made its W pattern in February 2016 and broke the Neckline of the W at march 2016. USO  moved up to the 100 day moving average and started to pull back to the down side.USO pull back was perfect until it broke down the neckline of  W . ETF   came back to the neckline but failed to close above the neckline.  When ETF gaped down from  the neckline, it became a concerned for etf and whole oil sector whether the latest broke out was fake.

USO Chart
USO Chart

However, USO came back to the neckline again and closed above the neck line and started to push higher. USO retested  its neckline with small pull back. This time USO  is closed above the 100 day simple moving average and pushing to the upside as market is pushing to the upward.

XLE ETF:

XLE is an energy sector ETF of S&P 500. Currently this etf looks bullish among all the oil and energy etf. As oil price went down, all the oil and energy companies were affected badly. XLE etf was also affected by low oil prices. However, XLE was least affected among the oil etf of the market because XLE etf  holding companies were all big players in the market and were least affected by recent oil price collapsed.  ETF recovered very quickly as oil price started to show its strength. Currently ETF is up 8 .33 %  from its from 2015 close.

XLE Chart
XLE Chart

Chart shows that XLE already has a beautiful upward trend line. XLE also broke 100 day and 50 simple moving average. 100 simple moving average   worked as support line in its last small pull back. During the pullback ETF volume was dried up and volume escalated during the stock upward move. Recently ETF crossed the 200 day moving average with strong volume and  is holding above the 200 day simple moving average.

XLE today closed above the upper band of Bollinger. This is a little bit concern as ETF may pull back and came back to the Bollinger band. Another point is MACD shows divergence to the ETF. This also signals that ETF may pull back at  any time. However, this pull back should be for small time frame. In the long term, ETF is strongly bullish and investors and stock trader should not be concerned until market shows any warning sign or pull back.