XLF Breaking Down Below Key Support

2 may 2022

Price has been in a downtrend since early this year but has consistently found support at the specified level. In the last 6 months, price has bounced off of that level 5 times and each bounce has resulted in substantial appreciations. Now, that support concords with a prespecified Fibonacci level of support. However, XLF seems to be breaking down; if it fails to hold this key level, we could see a substantial depreciation in the coming weeks and months. RSI has touched oversold levels (currently at 29) for the first time this year which also indicates an impending downtrend. And the Fed's hawkish sentiment(alerts to the possibility of a 50 basis point rate hike) further supports this bearish thesis for the financial sector and the broader market. Look to enter a short position with a stop loss at $35.5; PT#1 is $29-$30 where support will likely come in again.