SPDR S&P Oil & Gas Exploration & Production ETF (XOP) has broken up out of a bullish continuation wedge pattern five days ago on a gap up, indicating the likelihood of further upside. Watch for a throwback for a good entry level and the possibility of the breakaway gap being filled. The retracement of the wedge found support right on the 200ema, also a bullish sign.
XOP ETF Bullish Wedge Breakout & Trend Continuation
The first target is the high resistance of $44.17 made on October 21, signaling a completion of the wedge objective, followed by the top channel line. The October 21 high is also a 161.8 per cent Fibonacci extension of the downtrend started from the June 2, 2009 high. After that the next level to watch is the 261.8 per cent Fibonacci extension level (around $57.30) of the same downtrend.
XOP ETF Bullish Wedge Breakout
A similar pattern is exhibited in PowerShares Dynamic Energy Exploration & Production Portfolio ETF (PXE). But, PXE is showing slightly relative weakness compared to XOP as it broke below the 200ema and its uptrend line, although it is also giving a bullish signal.
PXE ETF Bullish Wedge Breakout
