DB Energy ETF Advances as Anticipated
On Wed Jun 11, Mike added the PowerShares DB Energy Fund ETF (DBE) as a short-term trade alert. He noted that the ETF holds futures contracts in Brent, WTI, Heating Oil, Gasoline and Nat Gas, and provides a vehicle for participation in an explosive advance in energy in the event of a supply disruption abroad and at home.
In other words, the trade combined Mike's macro analysis of oil prices and geopolitical event risk with his strategic technical work.
The DBE was trading at 29.94 at the time, and on Thursday closed at 30.76, with Mike's target range at 33-36.
Traders should be aware that the DBE trades an average of 78,000 shares on a three month basis, but lately its volume has declined considerably, some days below 7,000 shares.
If oil prices emerge from their longer- term coil patterns, the volume on vehicles like DBE should increase dramatically, but for now, be aware that trading is very thin.
See chart from Wednesday below.
More Top Calls From Mike
Back on June 17th, this is what we discussed about the TLT (20+ Year T-bond ETF)when it was trading at 112.53:
The TLT put in a big upside reversal day yesterday (6/16/22) from 107.80 to 111.72, closing RIGHT AT the High of 111.72, leaving behind a Bullish Engulfing Candle on my Daily Chart (not shown here). The last time TLT traded at 107.
On Friday June 17, Mike Paulenoff posted an alert to MPTrader members about an emerging setup in AMZN:
AMZN is one name that pops out at me that should benefit from an initial and sustained correction in traditional energy and transportation costs. AMZN needs to climb above and sustain 110 for my work to generate a more confident technical signal, otherwise, I cannot rule out another loop down that tests and breaks key May-June support at 101.26 to 101.
Last Wednesday, prior to the official FOMC rate hike of 75 bps, Mike Paulenoffwarned MPTrader members about the likelihood of additional weakness in the beleaguered home builders, writing about the ITB (iShares US Home Construction ETF):
In that, neither my pattern work nor my intermediate-term Momentum gauges offer much technical confidence that ITB will be able to carve out a meaningful corrective basing area in and around 53.
Back on May 13, amid a thrust in the price of Crude Oil from $95/bbl to $112/bbl, Mike Paulenoff alerted MPTrader members to an actionable technical setup in energy producer PSX (Phillips 66), writing:
My work has been extremely friendly since the beginning of May, looking for PSX to break out of its 11-month corrective accumulation pattern that will trigger a thrust towards a potential target zone of 110-115.
On Thursday May 19, in the midst of some serious weakness and carnage in the retail sector that had equity market-watchers doubting the resiliency of the almighty US consumer, Mike Paulenoff turned MPTrader members attention to PARA (Paramount Global), writing:
For the past 5 months, we could make the technical argument that PARA has carved out an accumulation-base formation that attracts buyers every time the stock dips beneath 29.00. We can also make the case that every time the stock climbs above 36.