XLP trade ideas
XLP Uptrend EndingThis rotation into XRT from tech, seems like a bad sign to me. Institutions getting defensive? Nevertheless, I don't expect it to move much higher. I could be wrong...
XLP Bullish Daily SetupXLP lining up bullish on the daily above 54.52 support with 50/200sma prepping golden cross (daily chart) and on the weekly chart 20/50ema golden cross prepping to confirm as well. This move could be extended over the next 1-2 quarters but will take time. As SPY pushes new alltime highs (again) I expect this to help as a minor catalyst to the already bullish setup and accelerate it a bit.
Buy the StaplesConsumer Staples slump due to amazon effect, higher interest rates, weak earnings performance, trade wars.
Multi-year technical support level and divergence in recent drop from all time high.
Value managers buy the dip. Play the bounce.
XLP 55 strike PUT, Betting on bearish XLP sector. Hi, my name is Spencer and it's been a long time since I've posted any ideas. I use to be a forex trader for many years and due to time constraints with my great full time job and becoming a dad, I've switched to trading stocks and specifically options.
For this trade, I am entering a short position on XLP by buying the 55$ strike for about 5 dollars per contract. Looking at the S&P500, I believe the overall market is about to struggle with higher interest rates and possibility of higher inflation. With this idea of higher interest rates, I've been watching which sectors have begin to perform the worst such as utilities, REITS, and especially consumer staples. Recently, Phillip morris had a huge sell off which equal to approximately 8% of the index. In addition to tobacco stocks struggling, the overall sector as whole has underperformed and has broken a "lower low" which signals a correction in the index. Currently we are tested the last support area before the index could really fall off the chart. My risk is of course the amount "I pay" for the option which 5$-5.10$ and am expecting atleast 1% move of the stock in order to break even. However, I could see another 10% correction and a possibility of a bearish trend beginning. With this in mind, the risk to reward ratio is about 1:1 and I hope to be making atleast 50% return and ultimately 100% in the longterm. If you are long the stock market, this is a cheap way to hedge the market buy selling one of the weaker sectors as bond yields increase.
Thanks for reading, and leave a comment. Sorry for the sound issue, its a little fuzzy but overall okay.
INVESTOR OUTLOOK, DEFENSIVE OR OFFENSIVE?We are still in a pullback area in the SPX , and we are very close to lows . That prompted me to investigate what are people doing , are people long or bearish the SPX. With further investigation, This ratio shows that a sector rotation out of Staples into energy is not underway , far from it. I hence think that the lows in the SPX are going to hold.
XLP Bullish Outlook XLP is just getting started and is lagging a bit. Im looking to take profit above $54 strike. So far so good. Lets see it contiue the break out similar to how SPY has.
Staples, RALLY or PULLBACKHere we broke through the lows, that confirmed that this sector is weak. So here is a simple setup. I want in if and only if we have a lower low , immediately XLP makes higher highs , I would be wrong.
US Consumer Staples Sector: Trend Reversal ImminentThe primary uptrend is coming to end; divergence and slacking indicators all point to consolidation at a minimum and probably a trend reversal. Exit-long is the least investors should consider. Depending on developments around the 53.05-area investors can also study potential shorts within the sector or short the sector as a whole.
Down side potential is decent: 50.40 and 48.70 form the first pivots and projection respectively.
XLP Bullish GartleyBullish Gartley with bullish divergence. Pattern is also showing a nice reversal doji candle.
Measurements
- .786XA
- AB=CD
- 1.618BC
Consumer staples has potential to trade higher short termStaples has lagged behind compared to other sectors with positive estimate revisions. Consumer staples is among the worst performing sectors in the s en p 500 over the last twelve months. Buy what is cheap.
XLP Bearish Rhino XLP has completed a bearish rhino pattern and is also showing bearish divergence on the VW-MACD.
Rhino Measurements
- 1.27XC
- XA=BC (.618/1.618)
- 1.618BC
- 2.618AB=CD
XLP long-term buyI came across an interesting pattern on consumer staples ETF (XLP).
The pattern is a channel spanning almost 9 years. The pattern is well tested and respected (7 reversals on the lower bound, 6 reversals on the upper bound)
Over the past two years, the ETF has consolidated gaining only 2% per year. Despite the consolidation, the ETF has an annual return of 22% for the past 9 years!
today we saw the price break and close above the previous weekly high, a bullish sign.
I love this trade because of the long-term price action and minimal risk.
my stop loss is at $54.02 (6.7% risk).
Economically speaking this space is extremely sound as consumers buy these products no matter the economic landscape. As shown by the price action this space offers slow and steady growth, due to the low elasticity and constant demand.
More demand for XLPXLP on the 15-minute chart rallied out of its base. If prices reaches the demand zone between 56.04 and 55.97, I'd want to be a buyer.
