$XLP - A smaller flag forming ahead of CPI within the broader rally of a larger bull flag

$Consumer Staples Select Sector SPDR Fund(XLP)$ - A smaller flag forming ahead of CPI within the broader rally of a larger bull flag.

With the monthly CPI data set to be released pre-market at 8:30 AM ET, XLP and $Consumer Discretionary Select Sector SPDR Fund(XLY)$ sector ideas could see momentum if the actual data deviates from forecasts.

XLP is currently the 3rd strongest 1-month relative strength (RS) sector, trailing only $Communication Services Select Sector SPDR Fund(XLC)$ and XLY. It is also the only sector, alongside XLC, to close with gains in yesterday's session - (XLC's performance was largely driven by $Alphabet(GOOG)$ $Alphabet(GOOGL)$ 's +5.6% surge following the launch of its Willow chip for quantum computing)

XLP has already broken out of a major bull flag with an initial peak-to-trough of +15%. The current mini flagpole stands at +4%, with price action mini flagging alongside the rising 10- and 20-DMA.

Currently XLP is only 1.5x its ATR% extension from the 50-DMA, while historically, it tends to peak around 5x ATR% extension. At its current levels, XLP represents a favorable risk-to-reward setup if it breaks above its flag range at $83. This exemplifies the ideal balance of risk and reward in a trading setup, in my opinion.

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It is also the only sector, alongside XLC, to close with gains in yesterday's session - (XLC's performance was largely driven by <a data-mention-id=\"GOOG\" class=\"teditor-mention\" data-mention-name=\"Alphabet\" href=\"https://ttm.financial/S/GOOG\">$Alphabet(GOOG)$</a>  <a data-mention-id=\"GOOGL\" class=\"teditor-mention\" data-mention-name=\"Alphabet\" href=\"https://ttm.financial/S/GOOGL\">$Alphabet(GOOGL)$</a> 's +5.6% surge following the launch of its Willow chip for quantum computing)</p><p>XLP has already broken out of a major bull flag with an initial peak-to-trough of +15%. The current mini flagpole stands at +4%, with price action mini flagging alongside the rising 10- and 20-DMA.</p><p>Currently XLP is only 1.5x its ATR% extension from the 50-DMA, while historically, it tends to peak around 5x ATR% extension. At its current levels, XLP represents a favorable risk-to-reward setup if it breaks above its flag range at $83. This exemplifies the ideal balance of risk and reward in a trading setup, in my opinion.</p><p class=\"t-img-caption\"><img alt=\"Image\" title=\"Image\" src=\"https://community-static.tradeup.com/news/e5f94ca912cff26fd0c981e299f941bb\" tg-width=\"679\" tg-height=\"507\"><span>Image</span></p></body></html>","htmlText":"<html><head></head><body><p> <a data-mention-id=\"XLP\" class=\"teditor-mention\" data-mention-name=\"Consumer Staples Select Sector SPDR Fund\" href=\"https://ttm.financial/S/XLP\">$Consumer Staples Select Sector SPDR Fund(XLP)$</a> - A smaller flag forming ahead of CPI within the broader rally of a larger bull flag.</p><p>With the monthly CPI data set to be released pre-market at 8:30 AM ET, XLP and  <a data-mention-id=\"XLY\" class=\"teditor-mention\" data-mention-name=\"Consumer Discretionary Select Sector SPDR Fund\" href=\"https://ttm.financial/S/XLY\">$Consumer Discretionary Select Sector SPDR Fund(XLY)$</a> sector ideas could see momentum if the actual data deviates from forecasts. </p><p>XLP is currently the 3rd strongest 1-month relative strength (RS) sector, trailing only  <a data-mention-id=\"XLC\" class=\"teditor-mention\" data-mention-name=\"Communication Services Select Sector SPDR Fund\" href=\"https://ttm.financial/S/XLC\">$Communication Services Select Sector SPDR Fund(XLC)$</a>  and XLY. It is also the only sector, alongside XLC, to close with gains in yesterday's session - (XLC's performance was largely driven by <a data-mention-id=\"GOOG\" class=\"teditor-mention\" data-mention-name=\"Alphabet\" href=\"https://ttm.financial/S/GOOG\">$Alphabet(GOOG)$</a>  <a data-mention-id=\"GOOGL\" class=\"teditor-mention\" data-mention-name=\"Alphabet\" href=\"https://ttm.financial/S/GOOGL\">$Alphabet(GOOGL)$</a> 's +5.6% surge following the launch of its Willow chip for quantum computing)</p><p>XLP has already broken out of a major bull flag with an initial peak-to-trough of +15%. The current mini flagpole stands at +4%, with price action mini flagging alongside the rising 10- and 20-DMA.</p><p>Currently XLP is only 1.5x its ATR% extension from the 50-DMA, while historically, it tends to peak around 5x ATR% extension. At its current levels, XLP represents a favorable risk-to-reward setup if it breaks above its flag range at $83. This exemplifies the ideal balance of risk and reward in a trading setup, in my opinion.</p><p class=\"t-img-caption\"><img alt=\"Image\" title=\"Image\" src=\"https://community-static.tradeup.com/news/e5f94ca912cff26fd0c981e299f941bb\" tg-width=\"679\" tg-height=\"507\"><span>Image</span></p></body></html>","text":"$Consumer Staples Select Sector SPDR Fund(XLP)$ - A smaller flag forming ahead of CPI within the broader rally of a larger bull flag. With the monthly CPI data set to be released pre-market at 8:30 AM ET, XLP and $Consumer Discretionary Select Sector SPDR Fund(XLY)$ sector ideas could see momentum if the actual data deviates from forecasts. XLP is currently the 3rd strongest 1-month relative strength (RS) sector, trailing only $Communication Services Select Sector SPDR Fund(XLC)$ and XLY. It is also the only sector, alongside XLC, to close with gains in yesterday's session - (XLC's performance was largely driven by $Alphabet(GOOG)$ $Alphabet(GOOGL)$ 's +5.6% surge following the launch of its Willow chip for quantum computing) XLP has already broken out of a major bull flag with an initial peak-to-trough of +15%. The current mini flagpole stands at +4%, with price action mini flagging alongside the rising 10- and 20-DMA. Currently XLP is only 1.5x its ATR% extension from the 50-DMA, while historically, it tends to peak around 5x ATR% extension. At its current levels, XLP represents a favorable risk-to-reward setup if it breaks above its flag range at $83. This exemplifies the ideal balance of risk and reward in a trading setup, in my opinion. 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