Energy Select Sector SPDR Is Dipping Below Support

xle New York, May 17th (TradersHuddle.com) - Shares of Energy Select Sector SPDR (NYSE:XLE) closed the trading session at $64.75 below calculated support at $66.43. The stock broke long setups, prompting the bulls to worry that this move might give the bears the upper hand.

Energy Select Sector SPDR (NYSE:XLE) is an ETF that seeks to provide investment results that correspond to the price and yield performance of the Energy Select Sector of the S&P 500 Index. Energy companies in the Index primarily develop and produce crude oil and natural gas, and provide drilling and other energy-related services. The Fund utilizes a passive or indexing investment approach to attempt to approximate the investment performance of the Index.

Energy Select Sector SPDR's stock was trading in a well defined range with support at $66.43 and resistance at $72.77; given that this range was broken traders will be closely monitoring the stock's price action for clues of direction.

From a technical perspective, it can be expected that previous support becomes resistance, as the new range gets defined. However, $66.43 will remain in focus as Energy Select Sector SPDR's price action places the stock near the broken support. Traders will be waiting to see if it can bounce back and return to its previous range.

Traders wanting to establish a short position in Energy Select Sector SPDR can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $66.43. However, if traders want to build a long position, the best entry point to do so is when the price action takes the stock back to calculated support.

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