PowerShares Dynamic Oil Services Portfolio ETF (NYSEARCA:PXJ) broke out of a bullish wedge continuation pattern several days ago and has now identified a price level for possible entry. Two days ago it tested support of the top line of the wedge. A move through the short term resistance of $16.81, the highs of the past several days, would indicate strengthening and a continuation of the trend and wedge breakout.
On the retracement forming the wedge PXJ found support above the 38.2 per cent Fib retracement level of the larger uptrend and just below the 200ema, both signs of strength in the larger trend.
The first objective is the beginning of the wedge at $18.78. Also, the 38.2 per cent Fibonacci retracement of the larger down trend begun July 2008, and the 161.8 per cent extension of the smaller downtrend started from the high of June 11, 2009, are also in that same resistance zone.
Watch for price behavior as it approaches the first resistance level of $17.59 from November 18. If price moves through that level then the continuation move is confirmed and chances increase PXJ can continue to the top channel line before it’s done. For more see www.etftrends.net. Chart from freestockcharts.com.
Disclosure: no positions