OIL - NEW BULLISH CYCLE IN THE MAKING
Please the last 2 charts I posted covering the bearish cycle that began from May 2011 for back ground details and other comments - links are below. In the last chart I suggested a possibility that the oil might bottom around 25 - 27 area for this cycle to complete, despite the fact that there is still widespread bearish sentiments fundamentals based on over supply looming economic downturn. Nevertheless, from price charts it appears that we might have the low in place now and should be looking for either a complete reversal or significant retracement bounce towards 60 -70 zone in due course.
Please watch the video " Oil - Roadmap & Big Picture View" for more details explanation -
Link: danv-charting.com/OTG-oil-3AiXKXMYmxUgBkh80IH93e.html
Here is the summary of technicals observation from the chart:
1. We have declined approx, 77% from May 2011 which are similar drop from 1990 -98 and 2008 -09 .
2. we are at previous support zone visiting for the 1st time in both UK Brent and US (WTI) accompanied with dropping volume to suggest selling pressure easing.
3. UK Brent formed a classic Ending Diagonal (falling wedge) from May 2011 of 3-3-3-3-3 construction now complete
4. Similarly fr the US (WTI) we have corresponding zigzag with final wave taking a shape of Ending diagonal wave 5 also now complete) 4.
5. Potential confirmation of reversal appear to be evident in price taking out the previous pivot high in process of now forming series of higher highs and lower lows.
6. As this moment the upside could be 60 - 70 zones based on Elliottwave guide lines that retracement could target wave 4 of one lower cycle degree and that it also coincides with possible structural previous support which now could be resistance.
Conclusion: On the watch out for bullish trades setup upon decent retracement.
Potential candidates would be long the Oil or shorting the companies whose fuel bill forms a significant part of operating cost such as airlines and freight transport.
Warning: This is my interpretation of price action using TA approach that I consider helps me the most but could be completely wrong. Therefore as always, please do your own analysis for your trade and risk management. You should follow this on Paper Trading Account till you feel confident to apply the skill to a live account.
DanV
danv-charting.com
Please watch the video " Oil - Roadmap & Big Picture View" for more details explanation -
Link: danv-charting.com/OTG-oil-3AiXKXMYmxUgBkh80IH93e.html
Here is the summary of technicals observation from the chart:
1. We have declined approx, 77% from May 2011 which are similar drop from 1990 -98 and 2008 -09 .
2. we are at previous support zone visiting for the 1st time in both UK Brent and US (WTI) accompanied with dropping volume to suggest selling pressure easing.
3. UK Brent formed a classic Ending Diagonal (falling wedge) from May 2011 of 3-3-3-3-3 construction now complete
4. Similarly fr the US (WTI) we have corresponding zigzag with final wave taking a shape of Ending diagonal wave 5 also now complete) 4.
5. Potential confirmation of reversal appear to be evident in price taking out the previous pivot high in process of now forming series of higher highs and lower lows.
6. As this moment the upside could be 60 - 70 zones based on Elliottwave guide lines that retracement could target wave 4 of one lower cycle degree and that it also coincides with possible structural previous support which now could be resistance.
Conclusion: On the watch out for bullish trades setup upon decent retracement.
Potential candidates would be long the Oil or shorting the companies whose fuel bill forms a significant part of operating cost such as airlines and freight transport.
Warning: This is my interpretation of price action using TA approach that I consider helps me the most but could be completely wrong. Therefore as always, please do your own analysis for your trade and risk management. You should follow this on Paper Trading Account till you feel confident to apply the skill to a live account.
DanV
danv-charting.com
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