SPDR Select Sector Fund ETF – XLF Elliott Wave Technical Analysis

Daily Chart Analysis

• Function: Major Trend
• Mode: Motive
• Structure: Impulse Wave
• Position: Wave 4 (Grey)
• Direction: Mini Decline

Details:

• The bearish trend remains in force, heading towards the completion of wave [c] of a flat wave 4.
• Wave 4 is expected to bottom between $46.02 and $47.38, aligning with the most common Fibonacci retracement levels for wave 4 (38.2% & 50%) and the 200 EMA, which acts as support.
• Confirmation of a reversal will occur if the price breaks above $48.00.
• After the wave 4 bottom, a 5th wave rally is anticipated, pushing prices above the origin of wave 4.
• Invalidation Level: Any decline below $44.00 raises doubts about the current Elliott Wave count.

4-Hour Chart Analysis

• Function: Minor Trend (Grey)
• Mode: Corrective
• Structure: Impulse
• Position: Wave [c] (Navy) of Wave 4 (Grey)
• Direction: Downtrend

Details:

• A rally should resume once the wave [iv] throwback is completed.
• Wave iv is expected to end within the highlighted Fibonacci levels.
• The Kennedy Blue Box, a common reversal zone for 4th waves, is in play, suggesting a similar expectation here.
• If the decline reaches 50%, entering long positions at the 38.2% retracement with a stop-loss below the 61.8% level is a viable strategy.
• The minimum target is set at $52.50.
• Invalidation Level: Any drop below $44.00 would raise doubts regarding the current wave count.

Conclusion

• The wave decline in XLF continues, and the correction phase is nearing completion.
• Once the correction ends, the market should rally above the origin of wave 4.
• This presents a strong opportunity for ETF traders looking to go long.
• Following Elliott Wave rules and monitoring invalidation levels is crucial to avoid potential losses.

Technical Analyst: Siinom

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