THE STOCK & ETF CORNER

DUG : Buying some at $27.23

Protective stop at $26.66

 

XLE/DUG : As predicted !

As predicted in the last post (Click here) XLE has broken down the support level !! I hope some of you have picked some DUG when I suggested it !!

XLE/DUG : Mirror chart

XLE/USO : XLE is running way ahead of the Price of Oil !

In the summer of 2008 the price of oil were near $145. At that point in time XLE (XOM and friends) was trading near $90.

XLE is now trading the $80 level. Back in 2008 that $80 level in XLE represented a price of oil of about $130.

Riddle me this. The price of oil is currently at $102 and XLE is at $80. 

Technically XLE should be trading near $60 .. not $80.

We know that XLE is way overbought and getting close to that .786 fib retracement near $80.

Above all .. it's way overvalued vis à vis the price of oil !

At some point there will be a dramatic adjustment and that when DUG (Double short XLE) will make a killing !