DRIP (3x bearish/short oil & gas exploration & production ETF) will be added as an active trade here around the 6.17 level. This is an aggressive, counter-trend trade but the R/R is attractive & the bullish divergences on this DRIP 60-min chart (negative divergences on XOP), as well as on the 60-min & daily charts of crude oil, appear to support the case for a pullback in the energy stocks.
DRIP 60-min May 17th
I choose to go with the 3x leveraged ETF as I suspect that any pullback soon will likely be fairly swift & unidirectional, with mostly red closes. Should that prove to be the case, DRIP would likely provide a return of more than 3x what the non-leveraged XOP falls.
The price targets are T1 at 6.82 & T2 at 7.10 with the possibility of a third price target to be added around the 8.15 level, depending on how the charts develop going forward. The maximum suggested stop is any move below 5.90 & the suggested beta-adjusted position size on DRIP is 0.35 (approximately 1/3rd a typical position size).
XOP 60-min May 17th
Comparable targets (actual support levels, not adjusted for an optimal fill) are provided on the XOP 60-minute chart above. Although DRIP will be listed as an Active Short Trade, one would buy or go long DRIP to short the energy sector.