1, 2, 3, eyes on X-ME! $XME – February 9, 2022


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This is Scott with your Chart of the Day. I want to take a look at XME ( NYSEARCA: XME ), this is a Metals & Mining ETF, and I will tell you why. As you can see, if I zoom out here to see the last year or so of XME ( NYSEARCA: XME ) a lot of the last year or so has been in this sideways consultative range, 9-months of sideways consolidation.

I like the fact that this has been consolidating for a while and now, just today is testing the previous highs. You can see how this area was a level of resistance. We tested it and failed, tested it and failed, and here we are testing it again.

If you haven’t noticed, the Commodities ETF, DBC ( NYSEARCA: DBC ) is tracking near the highs and so that kind of has me interested in what the metals ( NYSEARCA: XME ) are going to do tomorrow with the release of the Consumer Price Index. Are Commodities and Metals and stuff still going to catch a bid with this new information that we have for January of this year?

I want to keep an eye on the XME ( NYSEARCA: XME ) and some of the metals and mining stocks because some of them are looking really, really extended but also really, really good. One, for example, is AA ( NYSE: AA ), this is Alcoa ( NYSE: AA ). You can see how this is hitting new highs here and then don’t have earnings until April.

I want to keep an eye on stocks like this because they are in really strong uptrends. And while AA ( NYSE: AA ), for example, is extended it does have me interested in the fact that some of the stocks are hitting new highs, but the XME ( NYSEARCA: XME ) ETF isn’t just yet. And so I think that there could be an opportunity here, albeit this is extended.

I want to keep an eye on this sector for, potentially, a break out higher and then a daily higher low, something Dan Fitzpatrick calls a Phase 2. You have the Phase 1 breakout, and then you have the Phase 2 pullback to support. So I want to watch this for a breakout and then a pullback to support. And if that pullback to support comes back to the major moving averages and bounces off, that could give us a low-risk entry using those moving averages as a level to define a risk-off of.

So while I do believe that this is very extended away from these moving averages, I do want to keep it on my radar. Because in the event that this breaks higher and can finally get out of this consolidation I think we are going to see some trading opportunities in a lot of the stocks that the XME ( NYSEARCA: XME ) ETF holds. So this is definitely a sector we should keep our eyes on in this market.

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