Potential Diamond Continuation Pattern In XLE

Should we get an upside breakout of this diamond pattern, as a continuation pattern, the measured target would be equivalent to the move leading up to the pattern (arrows). Keep in mind that diamond patterns often act as reversal patterns & prices could certainly break to the downside, which would have near-term bearish implications for the energy sector. XLE (Energy Sector ETF) is not an official trade idea at this time but I did want to share the pattern as it meshes with the fact that crude oil is approaching major long-term support with bullish divergences in place, thereby indicating that the odds of a trend reversal in near future are starting to rise.

XLE stock chart diamond pattern price target

XLE daily Dec 2nd

Dec 2, 2015 11:42am|Categories: Equity Market Analysis|Tags: |Comments Off on Potential Diamond Continuation Pattern In XLE