The S&P Select Energy ETF (XLE) rallied sharply higher on Friday, helping to form a new main bottom on the weekly chart at $61.11 and putting the market in a position to breakout above seven weeks of highs.
An initial thrust this week should lead to a test of the downtrending Gann angle at $67.00. If upside momentum remains strong then the rally should continue until it reaches a key 50% level. Based on the main range of $76.50 to $61.11, a major retracement zone has been formed at $68.81 to $70.62. This zone is a potential near-term target.