Here’s the current update as the fund makes yet another new swing low in August:
Like I highlighted this morning in SNAP, “weak stocks tend to get weaker.”
This logic also applies to ETFs and broader markets as well.
The Energy sector is the latest victim of “weak stocks get weaker” as price broke to a new swing low this morning in an ongoing daily downtrend.
Also, when looking to trade a bullish swing trade in a stock scan, take a moment to check the sector trend to increase your chances of a successful outcome.
Given two stocks – one in Energy and the other in an uptrending sector like Technology (XLK) – choose the one with the stronger (more bullish) sector trend.
While it’s not always as clear as this, take advantage of the times it is.
Unless you’re a bear — and making a lot of money here — stay out of the Energy sector until/unless we get a reversal.
The SPDR Energy Select Sector Fund (NYSE:XLE) was unchanged in premarket trading Thursday. Year-to-date, XLE has declined -15.41%, versus a 11.49% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of AfraidToTrade.com.