XLF daily - decision time coming soon
XLF indicates two possible patterns, bullish and bearish.
For a bullish option it develops a large inverted SHS pattern, while for a bearish one it develops a rising wedge.
The last trading day last week price gaped down due to bad financial reports, however the day closed in the positive with solid volume which is bullish.
The RSI is in overbought territory and indicates a likely correction, which is bearish.
MACD histogram is ticking up and both MACD and signal lines are above the zero line which is bullish, however negative divergences have developed which is bearish.
Overall: if the day closes above the upper blue trend line, a bullish reversal pattern inverted SHS would be triggered, which would be extremely bullish for XLF as well as for the entire market, because the market cannot go against the banking sector. Resistance would be the ATH area.
On the other hand, in the event of further negative financial reports and a drop below the lower trend line, a bearish rising wedge pattern would be activated and the price would certainly continue to fall. Support would be first the right shoulder and then the head of the pattern marked with a red dotted line.
For a bullish option it develops a large inverted SHS pattern, while for a bearish one it develops a rising wedge.
The last trading day last week price gaped down due to bad financial reports, however the day closed in the positive with solid volume which is bullish.
The RSI is in overbought territory and indicates a likely correction, which is bearish.
MACD histogram is ticking up and both MACD and signal lines are above the zero line which is bullish, however negative divergences have developed which is bearish.
Overall: if the day closes above the upper blue trend line, a bullish reversal pattern inverted SHS would be triggered, which would be extremely bullish for XLF as well as for the entire market, because the market cannot go against the banking sector. Resistance would be the ATH area.
On the other hand, in the event of further negative financial reports and a drop below the lower trend line, a bearish rising wedge pattern would be activated and the price would certainly continue to fall. Support would be first the right shoulder and then the head of the pattern marked with a red dotted line.
Consistency is the key of success....