image of XEL stocks trade idea header

XEL Stocks Swing Trading Idea – Long

The Wave5trade Elliott Wave Indicator suite for the NinjaTrader and TradeStation Platforms has been used to put together this LONG Stocks Swing Trading Idea on $XEL on the Weekly timeframe.  As per the chart on the original video below, the overall bullish trend can be seen and the automated Elliott Wave count indicates the XEL (Xcel Energy) stock has pulled back against the main Bullish trend on a Wave 4.  The wave5trade strategy involves trading the 5th Wave of the Elliott Wave sequence as it is the highest probability move in a “with trend” trade.

Since the original video was made this stock, like many others, suffered in the large Bearish Correction in the markets.  However their is still a good Long Swing Trading Opportunity in XEL.  We have adjusted everything to compensate for the Deeper pullback, as per the chart below. The Wave 4 has pulled back and found support now in the Red Pullback zone, which indicates an 75% probability that the 5th Wave will go on and make a new high in this current bullish trend. The Pullback zones are part of our Elliott Wave Indicator Suite.  We will discuss the remainder of the potential Long swing trading setup on XEL below the Video. The Setup figures for this potential Long are also below the original video in this post.

image of XEL swing trading chart
(Click on image to enlarge to full size in new window)

There are quite a few elements that are included in our Elliott Wave Indicator Suite for the NinjaTrader NT8, Thinkorswim and TradeStation Platforms. Lets discuss in order to build up the picture of this potential Long trading opportunity on XEL.
  1. The Wave 4 pullback has found support in the Red Zone of our Specially programmed zones to indicate an 75% probability of the 5th wave making a new high.
  2. The 5/35 Oscillator (included in our indicator suite) shows the Wave 4 pullback has broken the 140% of the highest point on the oscillator during the 3rd wave due to the recent deep pullback.  We must therefore be conservative on entry strategy
  3. The Stochastic has crossed over in the overbought zone and is heading up to break out the oversold zone, so we can say the overall Bullish trend is potentially back on.
  4. The Risk to Reward is 1:2 to the automated Target zone that our Elliott Wave Indicator Suite plots on the chart. So risking 1% of trading balance between stop loss and entry gives a potential reward of 2% into the target zone.  The minimum Risk to Reward suggested when trading the 5th Wave is 1:1.6 so in this particular case we have a strong Risk to Reward into the target zone.
  5. The Entry strategy is developed using previous price action AND importantly above the 6/4 Moving Average High (Green MA line on chart) which is also part of our Elliott Wave trading indicator suite.
So in this case we can see that we have a great deal of evidence that the Wave 4 has behaved as expected and we have a good risk to reward for the trade.  This gives a high probability of success for a Long Trade on XEL with the following.  We must be aware that the trade may not trigger this week but we are looking for a higher high and higher low on this weeks weekly candle to confirm more bullish momentum from the wave 4 support level. The Light blue support and resistance zone around the $45 price may cause some resistance this week, so we would look for this potential long to trigger at the entry in the next few weeks going through the 6/4 MA High (green MA line)

 

Long Entry at $46.32, which is above previous resistance level on the 3rd wave and the indicision doji on the 4th wave highlighted in yellow box.

Stop Loss at $41.48 which is below the new wave 4 low

Target Zone still at $55.00/$56.00

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