--> Energy ETF ($XLE) needs more time to base

Energy ETF ($XLE) needs more time to base


market timing model:


Buy Mode
– Timing model generated buy signal on close of March 5 (click here for more details)

today’s watchlist (potential trade entries):

$todays watchlist
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open positions:

Below is an overview of all open positions, as well as a report on all positions that were closed only since the previous day’s newsletter. Net P/L figures are based on two separate $50,000 model portfolios (one for ETFs and one for stocks). Changes to open positions since the previous report are listed in pink shaded cells below. Be sure to read the Wagner Daily subscriber guide for important, automatic rules on trade entries and exits.

$todays watchlist

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closed positions:

open position summary
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ETF position notes:

  • Canceling the $TAN buy setup for now.

stock position notes:

  • No trades were made.


ETF, stock, and broad market commentary:

The major averages sold off early, but recovered in the afternoon and closed in the upper half of the day’s range. The afternoon push resulted in modest losses acrross the board; however, the pick up in volume on the NYSE and Nasdaq produced a distribution day for both the S&P 500 and Nasdaq Composite (although not a convincing one).

With the market extended in the short-term, our scans have not produced much in the way of actionable, low-risk swing setups. A two to three day pullback in the major averages to or near the rising 10-day moving average would certainly help.

Our focus during a potential pullback would be on ETFs that are trading above or near 52-week highs. First Trust DJ Internet Index Fund ($FDN) has been trading near 52-week highs the past few weeks while holding above the 20-day EMA (minus a quick shakeout).

$FDN TIGHT CONSOLIDATION

If the price action continues to pull back in, then we could potentially see a pullback entry develop around the 20-day EMA. If the action holds above 43.50 and forms a tight, bull flag like pattern, then we will look to enter on strength above the highs of the range.

The Energy Select Sector SPDR ($XLE) is another ETF near highs, but its price action has wedged higher off the 50-day MA the past few weeks and looks like it needs another week or two of consolidation.

$XLE BASE

Ideally, we’d like to see a higher swing low form below the 20-day EMA but above the 50-day MA. A break of the prior swing low may signal that a deeper/longer correction is needed.

Please note that we have canceled the buy stop order for $TAN. The price action looks like it needs a few weeks (at the very least) to build a decent base, so we are in no hurry to establish a position. We will continue to monitor the action.

On the stock side, we still have one long position in $HCA, which looks good on the hourly chart as long as it continues to set higher highs and lows.

With the market extended in the short-term, we are basically waiting for a slight pullback in the market to improve setups. Some setups are going right now while others are treading water.

$ALNY is a potential unofficial buy setup based on Tuesday’s bullish reversal candle.

$ALNY DAILY

The entry is above Tuesday’s high with a tight stop beneath the low of the same day. If yesterday’s reversal holds, then it will create a second higher swing low within the base.

relative strength combo watchlist:

Our Relative Strength Combo Watchlist makes it easy for subscribers to import data into their own scanning software, such as Tradestation, Interactive Brokers, and TC2000. This list is comprised of the strongest stocks (technically and fundamentally) in the market over the past six to 12 months. The scan is updated every Sunday, and this week’s RS Combo Watchlist can be downloaded by logging in to the Members Area of our web site.

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