• 10 hours Bezos’ Next Big Project Could Be Worth $100 Billion Per Year
  • 12 hours 3,600 Years Later, Climate Change Turns Mammoths Into $40M Market
  • 16 hours Tesla, Apple Claim China Is Stealing Intellectual Property
  • 18 hours EV Giants Duke It Out For Battery Dominance
  • 1 day Tech Billionaire Takes Aim At Google
  • 2 days Chinese Police Bust Largest Ever Illicit Crypto Mining Operation
  • 2 days Expect A Pullback Before Gold's Next Major Rally
  • 2 days Why Interest On Gold Matters
  • 2 days Ten Extravagant Food Items For The Wealthy Only
  • 3 days Why Saudi Arabia Won't Give Up On The Aramco IPO
  • 3 days $32 Million Crypto Heist Halts Tokyo Exchange
  • 4 days Is A Gold Selloff Looming?
  • 4 days Central Banks Are Stashing Gold And Dumping Treasuries
  • 5 days Three Cannabis Trends Flying Under Investors’ Radars
  • 5 days $1.3 Billion In Cocaine Found On JPMorgan Vessel
  • 5 days Amazon Teams Up With Lady Gaga To Win Over Generation Z
  • 6 days Dollar Falls As Powell Teases Rate Cuts
  • 6 days Will The World's First Trillion Dollar Company Ever Bounce Back?
  • 6 days Many Americans Will Never Stop Working
  • 6 days Mozilla vs DarkMatter: The Cyber Espionage End Game
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

  1. Home
  2. Markets
  3. Other

Oil: Approaching a Sharp Pullback

Monthly time frame (Continuous contract)

  • The Falling wedge carved out during 2015 can have completed a Zig Zag form the 2008 top (ABC), however Oil has still a lot of work to accomplish in order to confirm this bullish scenario
  • The next resistance is at R1 = 50.94
  • If Oil is able to reclaim and remain above R2 = 62.57 then the odds of a long-lasting bottom would substantially increase.
  • Below the current price we have the 10 m ma = 41.66 then S1 = 38.39 and S2 = 33.20 (January 2009 low)
  • So far we have a monthly Spinning Top candlestick, which is suggesting a probable pause.

Oil Monthly Chart
Larger Image

  • Monthly oscillators are bullish. It stands out the large positive divergence of the RSI. The trend line off the 2008 high must be breached in order to confirm a major bottom. The MACD so far has a new bullish signal cross which must be confirmed by the end of May.

Oil Monthly Momentum Chart
Larger Image

Weekly time frame (June contract):

  • Oil is tagging the upper Bollinger Band.
  • So far we have a weekly Hanging Man with resistance at the 50 wma
  • If S = 43 is breached there is a pocket of air until the 20 w ma = 39.53
  • As long as the 20 wma holds a larger advance from the February low should be in the cards

Oil Weekly Chart
Larger Image

  • Weekly oscillators are bullish: The RSI shows a large positive divergence at the February low, it has broken through a trend line resistance off the May 2014 high and it has reclaimed the 50 line. The MACD also with a positive divergence has triggered a buy signal on February. Hence facing the likelihood a potential pullback price should establish a higher low without endangering a larger move from the February low.

Oil Weekly Momentum Chart
Larger Image

Daily time frame:

  • From the February low Oil has carved out a Rising Wedge.
  • It is not clear if it is completed.
  • If it is a Leading Diagonal during the following pullback, even if it should be sharp, price will establish a higher low (Allowing a larger rally from the February low)
  • If the Leading Diagonal plays out we could have two potential targets for the assumed pullback: 1) at the 50 dma = 41.90 2) at the support S1 = the range 39 - 38.50

Oil Daily Chart
Larger Image

  • Daily oscillators are displaying a negative divergence of the RSI (14) and a MACD that could be rolling down although OBV is rising firmly

Oil Daily Momentum Chart
Larger Image

 

Back to homepage

Leave a comment

Leave a comment