Trader MD

Here's DUG, which I had been looking to get into for the last few days.

I entered right after this mornings post on energy breaking down soon. Here's a screen shot from when I entered.

Take a few moments and look at it upon the time of entry.



Here's the annotated version after the close.



I think DUG can easily hit 29 or 30. The XLE still hasn't closed below the 50 day moving average and the DIG (the inverse of dug), has a bit more downside. Also, just as important, the $VIX hasn't really hit capitulation levels.

As I mentioned the other day, energy will be the last sector to really capitulate since its the strongest, and it's only began to break down.

All that being said, I'll be prepared to re-evaluate that line of thought on a daily basis and let the charts tell me what to do.

(I still have my entire position of DUG.)

I'll be happy to answer any questions, as this isn't exactly the most straight forward setup. Hopefully that wasn't too confusing.

Posted by Trader M.D. at 6:05 PM

Labels: Channel, Divergence, DUG