XLE Looks Positive - Exit

XLE Daily

Tough decision today. We closed closer to the low than the high, below the 8ema on high volume. We never got over the downward Trend Line, not even on an intraday basis. Stochastics are still above the mid-range, so there's plenty of room to fall further before worrying about being oversold.

But on the other hand, we're still in the congestion area and haven't broken out to the downside. We could easily reverse this price action tomorrow. Plus we're in an option, so our risk is fixed to the cost of the option.

Bottom line, given the relatively larger candle and higher volume, and the clear resistance from the Trend Line and the 50sma, and the priority of capital preservation over "being right", I decided to take a small loss to avoid taking a bigger loss.

Of course, we can always buy back in if appropriate. To that end, I set an alert for when XLE >= $89.

Summary:

XLE Mar 95 Call bought at 2.22 on 12/21/22, sold 1/3/23 for 1.58

158 - 222 = -$64 per contract.