The breakout should be in good shape as long as it continues to hold above the 20-day EMA, which is generally our line in the sand on new breakouts. The 20-day EMA has also crossed above the highs of the last base, which is a positive sign.
With 20-day EMA above the breakout pivot, the odds of the breakout surviving increases, as there is more support:
For those who missed our initial entry in S&P Oil & Gas ETF ($XOP), a potential pullback to the rising 10-day MA could offer a low risk buy point.
The 20-day EMA is also just below (at 76.64), as is the rising 10-week moving average on the weekly chart (at $76). So, there is quite a bit of support in the $76 to $77 area:
The stock market basically put in a consolidation day, with the price action pulling back into the 20-period EMA on the hourly charts of most major averages. Looking at the past two days in the S&P 500, the price action may simply chop around in a tight range for a few days while the 10-day MA catches up. So far, so good.
As long as current breakouts continue to consolidate in bullish fashion, holding above 10 or 20-day EMAs on light volume pullbacks, then the market should continue to push higher.
This article is brought to you courtesy of Morpheus Trading, LLC.