Swing Options Tip – (XLI) – May 6, 2020
Our bearish trade for Wednesday, May 6th is XLI (Industrial Sector ETF). XLI has gained 7.67% in the last month but its 1M and 6M trends turned bearish on April 1st and April 4th respectively suggesting further downside.
XLI is showing signs of slowing momentum and is struggling to move above the 50-day moving average. With a technical score of 4 (out of 10), XLI is a weak ETF that will likely remain or move lower from this level.
As a stop loss, if XLI were to trade above $65 for multiple days, this would invalidate our analysis and we would consider cutting losses on the trade. We also consider cutting losses on this options trade if the value of the vertical spread rises above $3.34.