Crude oil may have finally signaled a bottom with the weekly
chart ended 28th August, 2015 pointing towards renewed upward optimize
in the market value of the commodity. Technically, the trend showed a bullish
factor as the relationship between price action and momentum indicator has
shown a positive divergence (a positive divergence is a situation where price
forms a lower low while momentum indicator such as RSI 14 day period forms a
higher low).
Detailed technical trend
analysis:
Selloff triggered at $93.04 on 16/08/2014 after a support trendline
breakout
Downtrend reached a low of $43.56 on 24/07/2015 from an high
of $107.51
Corrective wave to around $60 a 75% Fibonacci retracement
level where we saw range bound trading for weeks
Downward resumption in the week 27/06/2015 when it closed
below the marked rectangle levels at $55.59
New low at $37.73 in the week 22/08/2015
Price pattern: Bullish engulf pattern (this is a reversal
pattern especially when seen at the bottom of a trend). The pattern closed back
above $43.56 to end the week at $45.27
Conclusion:
Crude oil to resume an uptrend with the first resistance
range at $62.56 high - $56.49
Trend reversal would be confirmed at the break above $62.56
Effect:
Buy signal on the commodity
Strong optimism in Currencies and Equities linked with the
commodity. Look for strong bullish trend in Canadian dollar, Austrian dollar, Crude
–oil mining stocks
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