Watching The Oil and Gas Exploration ETF For A Buy Entry (XOP)

sellbuyMorpheus Trading: For the third day in a row, the S&P 500 fought off early morning weakness and reversed to close near the highs of the day. Wednesday’s advance closed above the two-day high, but volume was light. Although the volume pattern during the rally in the S&P has not been ideal, it’s hard to argue with the price action when an index is trending higher above a rising 10-day MA.

The NASDAQ Composite cleared the three-day high in the afternoon but failed to hold that level into the close. If the NASDAQ holds above the 10-day MA just below, odds favor the index eventually pushing higher, which would invalidate the current head and shoulders pattern that is still in play on the daily chart below:

$NAZ head and shoulders pattern

In a solid head and shoulders pattern, the right shoulder should stay below the left. Sometimes the right shoulder may push slightly above the left. But when this happens, the price should reverse quickly to the downside and with power, to confirm that the pattern in still in play.

As mentioned above, the Nasdaq may eventually push higher and invalidate the head and shoulders setup….but this is trading and anything can happen.

The energy sector continues to impress, with bullish patterns in energy ETFs $IEO, $XOP, $XLE, $ERX, $OIH, and $IEZ.

(...)Click here to continue reading the original article: Watching The Oil and Gas Exploration ETF For A Buy Entry (XOP) [SPDR S&P Oil & Gas Explore & Prod. (ETF)]

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