SPDR Select Sector Fund – Energy ETF – TradingLounge Day Chart

XLE Energy Select Sector ETF Day Chart Analysis

XLE ETF Elliott Wave Technical Analysis

Function: Major Trend

Mode: Motive

Structure: Impulse Wave

Position: Wave (5)

Direction: Uptrend

Details:

• The recent decline in wave (4) for XLE has successfully found support, signaling the beginning of wave (5) to the upside.
• The current rally is likely part of wave 1 or [i] of (5), indicating a potentially extended bullish movement ahead.
• We expect this upward trend to break above the previous $97.92 high with ease.

While wave (4) could still develop into a more complex corrective structure, following the principle of Occam’s Razor suggests favoring the simpler bullish outcome.

Invalidation level: $74.49

SPDR Select Sector Fund – Energy ETF – XLE (4h) Elliott Wave Analysis

Function: Major Trend

Mode: Motive

Structure: Impulse

Position: Wave iii

Direction: Rally

Details:

• Wave iii for XLE has officially started and shows signs of strong extension, possibly forming a leading diagonal pattern.
• The $76.00 price level is a key support to monitor for any short-term downside risks.
• Wave [2] correction is currently unfolding and should terminate within the marked Fibonacci retracement zone.
• A breakout above $83.19 after the correction will confirm the bullish trend continuation.
• Optimal Entry Strategy: Await a pullback (throwback) to the Fibonacci zone before entering long trades.

Invalidation level: $74.49

Technical Analyst: Simon Brooks

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Conclusion

Elliott Wave Summary for XLE:

• Wave (4) correction has ended, paving the way for the impulsive wave (5) targeting new highs.
• $74.49 remains the key invalidation point for the bullish scenario.
• After a minor wave [2] retracement—provided it respects the invalidation level—taking a long position is recommended.
• Adhering strictly to Elliott Wave rules and closely tracking invalidation points is critical for successful trading with minimal risk.