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XLU Weekly: Rally Early Week Toward Key Resistance Where A Sell Response Drove Price Lower To Test Key Support

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Sharedata Futures


  • A rally developed early to 60.40s as last Friday’s late sellers failed to hold the auction.
  • Sell excess developed there, driving price lower toward key support, 56.64s, before a breakdown attempt developed into the week’s end.
  • From a structural perspective, the highest probability path near-term is sell-side, barring failure of 60.04s as support.
  • Bullish breadth breaks down through mid-range.

In this article, we examine the significant weekly order flow and market structure developments driving NYSEARCA:XLU's price action.

As noted in last week's XLU Weekly, the highest probability path for this week was for price discovery higher, barring failure of 56.64s as support. This week's primary expectation did play out early week, as a rally developed to 60.40s within the upper end of the April balance area. Structural sell excess developed there, halting the rally before a selloff developed toward key support, 56.64s, in Thursday's auction. Buyers trapped in this area before a sell-side breakdown developed to 55.56s, ahead of Friday's close, settling at 55.88s.

XLU Weekly Auction 24Apr20

27 April-01 May 2020:

This week's auction saw minor price discovery higher to 59.35s in Monday's trade as last Friday's late buyers failed to hold the auction. Narrow balance then developed before buying interest emerged, 58.93s/59.02s, into Monday's close. Monday's late buyers held the auction as a gap higher open developed in Tuesday's trade, achieving the weekly stopping point high, 60.40s. Structural sell excess formed there, halting the rally as a pullback developed to 58.88s before buying interest emerged, 58.08s, into Tuesday's close.

Tuesday's late buyers initially held the auction as a retracement higher to 60.14s developed early in Wednesday's auction. The weekly sell excess held as resistance as the market rolled over and price discovery lower resumed with selling interest, 59.13s/59.02s, emerging ahead of Wednesday's close. A gap lower open formed in Thursday's trade, achieving a stopping point, 56.73s, testing key support. Buying interest emerged there as balance developed, 56.73s-57.51s, into Thursday's close. Thursday's late buyers failed to hold the auction as a gap lower open through key support developed in Friday's trade. The selloff continued, achieving the weekly stopping point low, 55.56s, ahead of Friday's close, settling at 55.88s.

XLU Weekly Auction 01May20

This week's auction did

This article was written by

Sharedata Futures profile picture
Historical Data Mining & Visualization for NYMEX energy markets. Our experience derives from the proprietary trading world involved in US Index derivatives, commodity ETF derivatives, and exchange-traded NYMEX WTI derivatives.Futures trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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