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By Mike Paulenoff, www.MPTrader.com
Time for a look at a comparison chart between the Energy Select SPDR ETF (AMEX: XLE) and the Proshares UltraShort Oil & Gas ETF (AMEX: DUG). The XLE (green in our chart) is in the grasp of a significant correction of its longer-term bull trend from the 19.38 low in July 2002 to the January 2008 high at 80.85. My next immediate target is in the 74.50-73.30 area, which amounts to about another 1%-3% from here. Meanwhile, the inverse ETF, the DUG projects next to 40.00-41.20 prior to hitting serious near-term resistance. Having said that, however, my longer-term technical work on the XLE is warning me that this decline is just the beginning of a much larger corrective move that projects to 68.00-66.00 area thereafter.
Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!
