Hello everyone! In today’s article, we’ll examine the recent performance of Consumer Staples ETF ($XLP) through the lens of Elliott Wave Theory. We’ll review how the rally from the October 06, 2023, low unfolded as a 5-wave impulse and discuss our forecast for the next move. Let’s dive into the structure and expectations for this stock.
5 Wave Impulse Structure + ABC correction
$XLP Daily Elliott Wave Chart 1.19.2025:
$XLP 4H Elliott Wave Chart 1.19.2025:
In the daily Elliott Wave count from January 19, 2025, we see that $XLP completed a 5-wave impulsive cycle beginning on October 06, 2023, and ending on September 16, 2024, at the black ((3)). As expected, this initial wave prompted a pullback. We anticipated this pullback to unfold in 3 swings first, likely finding buyers in the equal legs area between $78.87 and $75.67.
This setup aligns with a typical Elliott Wave correction pattern (ABC), where the market pauses briefly before resuming the main trend.
$XLP 4H Elliott Wave Chart 1.27.2025:
The most recent update, from January 27, 2024, shows that The ETF reacted as predicted. After the decline from the September peak, the ETF found support in the equal legs area, leading to a bounce. As a result, traders could adjust to go risk-free.
What’s Next for $XLP?
With the current bounce, the ETF appears well-supported. Based on the Elliott Wave structure, we expect the ETF to continue its upward trajectory, targeting the $80 – $81 range before another potential pullback. Therefore, it is essential to keep monitoring this zone as we approach it.
Conclusion
In conclusion, our Elliott Wave analysis of SPDR Consumer Staples ETF ($XLP) suggests that it could bounce in the short term. Therefore, traders should monitor the $80 – $81 zone as the next target, keeping an eye out for any corrective pullbacks. By using Elliott Wave Theory, we can identify potential buying areas and enhance risk management in volatile markets.
Source: https://elliottwave-forecast.com/video-blog/staples-etf-xlp-blue-box-offers-buying-opportunity/