I looked at XLE, the energy sector's ETF, about 1.5 months ago and am now comparing what was happening then to what is going on now. Then, the analysis was primarily looking at how much of a monthly bearish pattern would retrace and how price would behave at 71.70. Click here for that article.
The monthly chart on the left shows price has moved below the significant level of 71.70, as long as price holds below there, the probability is to complete the bullish pattern at 64.37. How price will behave at the PRZ is very important. Another notation is that the bearish pattern, colored cyan, has retraced a respectable amount, approximately 50%, so watch for price to hold above or below 61.89 because this level helps determine a bounce scenario or an increased probability of testing the ideal retracement target of 54.26.
Zooming into the Day chart perspective, on the right, there's a couple of things in the works that are noteworthy. There's an emerging inverse Head & Shoulders formation, the pink dotted line represents its neckline, a hold above there, then more importantly back above 71.7 increases the probability of testing the H&S targets as shown in pink. This would take price back inside a large GRZ (Golden Ratio Zone) and increasing upside bias with every level price can take out. The other thing worth noting, is there's a small brown colored emerging pattern which implies a hold below 69.52 will have downside bias to 66.29 target, then more important the 64.37 monthly target. This would invalidate the inverse H&S scenario, and also keep in mind that once price can test 64.37, there's a potential breach to tag 62 region, then it will be important as to where price exits the blue GRZ, either above 64.37 or below 59.65 for directional bias indications.
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