The Consumer Staples Squeeze XLP Sept 29

Sep 29, 2016: 10:12 AM CST

What’s about to happen with Consumer Staples?!

We’re seeing a compression or triangle form between key moving averages ahead of a decisive breakout.

The “EMA Squeeze” is one of my favorite patterns and we don’t see it often.

While we can see a normal short-term TRIANGLE in price, the key factor is that the triangle forms between the boundaries of the rising 200 day SMA and the falling 20 day EMA.

The “Midpoint Magnet” of the pattern is $53.00 per share as buyers and sellers find balance.

While we don’t play the triangle pattern, we will look to play a breakout from the pattern, either above the $53.50 (and $54.00) level for a bullish swing or else bearish beneath $52.50 for a bearish trigger.

Whatever happens, focus on the pattern and prepare for the future breakout.  It should be interesting!

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Corey Rosenbloom, CMT

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