In this technical blog, we will look at the past performance of the 4-hour Elliott Wave Charts of XLP. In which, the rally from the 23 March 2020 low unfolded as an impulse and made a pullback to correct that cycle. So, we advised members not to sell it because higher time frames are still favoring more upside in the ETF. Therefore, our strategy remained to buy the dips in 3, 7, or 11 swings at the blue box areas. We will explain the structure & forecast below:
XLP 4 Hour Elliott Wave Chart
Here’s Elliott wave Chart of XLP from the 5/19/2022 update. In which, the rally to $81.34 high ended the cycle from the 23 March 2020 low & made a pullback. The internals of that pullback unfolded as Elliott wave zigzag structure where wave ((A)) ended in 5 waves at $75 low. Then a bounce to $78.05 high ended wave ((B)) & started the next leg lower in wave ((C)) towards $71.69- $67.76 blue box area. From there, buyers were expected to appear looking for new highs ideally or for a 3 wave bounce minimum.
XLP Latest 4hr Elliott Wave Chart
Above is the latest Elliott wave Chart from the 5/26/2022 update. In which the ETF is showing a reaction higher taking place from the blue box area at $71.69- $67.76. Right after ending the zigzag correction within the blue box area. Allowed members to create a risk-free position with the minimum reaction higher towards 50%- 61.8% Fibonacci retracement of the previous wave ((C)) at $73.82- $74.81 area. However, a break above $81.34 high is still needed to confirm the next extension higher & avoid double correction lower.