Hess Corporation update

Last week, I showed the chart of Hess Corporation (HES) versus SPDR Energy (XLE) with a bearish divergence on its 14 week RSI and on the Performance Rank (PR) amongst the components of XLE. Here is the updated chart.

Weekly chart

The first of the three criteria I stated last week – a move of the weekly RSI below 70 has happened.

Daily chart

• The second of the criteria has been met – a break of the trendline
• The last criterion is a move to a new 14 day RSI low, below that of 12 September (purple arrow)
• I will add to that, a daily close of the pair below the 15 October low (blue arrow), taking the pair to a new low since 01 October

On those two events, a short position in HES v XLE will be opened, with a stop loss above the 21 October high. That is only 1.5% higher than the 15 October level, so quite tight.

Hess Corporation has an earnings announcement on 30 October. I’d like to get past that before opening a position. Previously, I have opened positions before earnings, then the reaction has negated the entry signal.