Tuesday, March 01, 2016

Consumer Staples (XLP): Double Trouble

Trouble is brewing on the market stalwart ETF Consumer Staples (XLP). While making my random glances across my charts this morning I've noticed a bearish ascending wedge on the daily chart and the 30 minute chart. This comes at a time when the S&P is feeling a little overbought and the greater market seems to meandering aimlessly.
On the the 30 minute chart we see XLP breaking down from a well established bearish ascending wedge (I've put in a possible support channel line in case it bounces a second time).
The daily chart show a much larger ascending bearish wedge that has been developing since August. We already have three taps on the upper resistance line with it currently making it's fourth. Two trading sessions ago we had a very strong rejection of a break above with a large downward candle being put in. Consumer Staples (XLP) looks like a short/sell at the moment.