I have decided to go ahead and book full profits on the ERX/XLE short trade & officially close the trade here at the current price of 58.22. ERX was originally shorted at 67.21 on April 30th, providing this trade a gain of 13.4% in just under a month.
Some of the reasons for both personally & officially closing this trade are my previously stated concerns that the bounce in the US Dollar has likely run its course and if so, dollar down = oil up. I've also concerned about the bullish divergences that were put in place on this today's lows in XLE as well as the fact that XLE has fallen to a decent horizontal support level on the daily time frame.
I'll post some updated charts soon but just wanted to get this out asap. ERX & XLE will now be moved from the Active Trades to the Completed Trades category as the R/R no longer warrants remaining short at this time.
While I am closing this trade, I am not bullish & do not plan to position long for a bounce, at least not at this time. In fact, I can certainly see some more downside in the energy stocks in the weeks & even months to come although I have several major energy stocks at or near key long-term support levels so the sector could certainly go either way from here. For those still bearish on the energy sector, at least consider lowering stops to protect profits at this point. Charts to follow.