Commodity ETFs Form Bullish Reversal Candlestick Patterns

Gold and energy equity ETFs formed bullish engulfing candlesticks during today’s trading session after printing bullish hammer reversal candlesticks yesterday:

 

GDX (Daily)

GDX_Daily_1.21.2016

 

 

OIH (Daily)

OIH_Daily_1.21.2016

The backtest results for a bullish engulfing candlestick in OIH are especially impressive over the short term (1-5 days):

 

OIH_Backtest

 

XLE (Daily)

XLE_Daily_1.21.2016

This is the best sign of a reversal in these much maligned sectors that we have seen in at least a couple of months. One day does not make a trend but a trend reversal needs to begin somewhere, and these candlestick patterns are as good a sign as any that a reversal could be underway.