When ETFs drop to support levels and become oversold, they tend to rebound or rally. That may be the case with The Real Estate Select Sector SPDR Fund XLRE.
On the following chart, the red line is two standard deviations below the 20-day average price. This is important. Standard deviation is a statistical concept and many trading strategies are based on statistics and probability theory.
They suggests that 95% of trading should be within two standard deviations of the mean or average. If this threshold is exceeded, trading programs will be expecting a reversal. They will buy XLRE and may end up pushing the price higher.
XLRE is also at a support level. The last few times it dropped to $44.30, the buyers overpowered the sellers and pushed the price higher.
When markets are oversold and fall to support, they tend to rally. That could happen here.
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