XLE could be forming a Falling Wedge that would conclude a Zig Zag from the June 2014 high.

For the time being it is just a potential pattern but it is worthwhile to keep an eye on the price action and maybe get involved.

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If there is a chance that this pattern plays out lets establish few requirements:

1. It would be preferable that Monday's lod holds (Marking a higher low)
2. Price has to breach the Resistance 1 located at 56.50
3. If the wave (IV) of the Falling Wedge were underway it must overlap above 58.74 and fail at the upper trend line. It would mean a rally of 10% +/-

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Curiously enough in the 60 min time frame we can see that XLE if the support at 53 is not breached has a potential Inverted Head & Shoulder which has a measured target at the upper trend line of the assumed wedge.

Maybe there is a potential long set up.

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