POTENTIONAL BEARISH SHARK PATTERN IN CRUDE OIL!
Updated
The recent plunge in oil prices potentially being the bottom for 2017 as the market really is fundamentally tightening up,though it is never possible to call a bottom, but I suspect this is a great buying opportunity before a big jump in prices by the end of the year.
Oill may have dropped nearly 7% in the past week alone, there was little, fundamentally (in terms of actual changes in the supply/demand/inventory outlook), that justified the sell-off and extreme pessimism. So what wa actually behind this move of Oil?
If we exclude one bearish inentory report,which it's affect was covered quickly by others neutral and bullish reports,and some concerns over demand from China, but oil demand is still expected to be impressive this year (1.6 million bpd, which is 60% higher than the 10-year average).
Goldman Sachs recently stated, the move was due to technicals, not fundamentals.In other words, crude plunged below its key 200-day moving average, as well as below a major price trend-line, and this resulted in many large hedge funds being forced to sell to adhere to their risk-management policy.
Typically, crude inventories rise at this time of year, and the fact they have been falling is bullish. In fact, looking at the 10-year median, crude oil stocks do not typically start to decline until the end of May, which coincides with the start of driving season.
This should lead to much larger draws in inventories, and a much more bullish outlook on oil prices (especially if OPEC agrees to extend their production-cut agreement, which is widely expected).
Over the longer term, should demand hold up, several years of major underinvestment due to the oil price crash should lead to supply issues and should support prices if of course US supply stops increasing as it does the last 10 months.
TECHNICALLY POINTS
AS WE AT THE CHART WE ARE GOING TO FORM A BEARISH SHARK PATTERN
B POINT DOESN'T HAVE CERTAIN CRITERIA BUT IT'S MORE VALID WHEN PASS THE 50% FIB LEVEL OF XA
C POINT IS BETWEEN THE 1,13 AND 1,618 EXTENSION LEVEL OF AB
D COMPLETION POINT IS FROM 0.886 TO 1,13 EXTENSION LEVEL OF XA
AS WE CAN NOTICE THE COMPLETION D POINT IS AT PREVIOUS HIGHS AND RESISTANCE POINTS AT 53,90$ WITH THE MAXIMUM POTENTIONAL LEVEL AT 56$ OF 1,13 FIB EXTENSION
WE CAN ALSO SEE THAT THE "SHORT" TARGETS OF THE BEARISH SHARK PATTERN AT 38,2% AND 50% OF FIB RETRACEMENT COINCIDES WITH THE ASCENDING CHANNEL OF OIL PRICES AT 50,50$ AND 49,50$ LEVEL AND ALSO THE 200MA
POSSIBLE TRADES:
LONG TRADE:FIRST TARGET (T1) AT 53,90$ WITH THE 0.886 FIB RETRACE OF XA LEG
SECOND TARGET (T2) AT 56$ AT 1,13$ FIB EXTENSION OF XA LEG
STOP LOSS AT 44,30
SHORT TRADE AFTER D COMPLETION POINT:FIRST TARGET (T1') AT 50$ 38,2% FIB RETRACEMENT OF CD LEG
SECOND TARGET (T2') AT 48,80$ AT 50% FIB RETRACEMENT OF CD LEG
THIRD TARGET (T3') AT 47,50% FIB RETRACEMENT OF CD LEG
BUY STOP AT 53,30$ OR PREVIOUS HIGHS WHEN FORMED
THANK YOU FOR SUPPORT
HAPPY TRADING!!
Oill may have dropped nearly 7% in the past week alone, there was little, fundamentally (in terms of actual changes in the supply/demand/inventory outlook), that justified the sell-off and extreme pessimism. So what wa actually behind this move of Oil?
If we exclude one bearish inentory report,which it's affect was covered quickly by others neutral and bullish reports,and some concerns over demand from China, but oil demand is still expected to be impressive this year (1.6 million bpd, which is 60% higher than the 10-year average).
Goldman Sachs recently stated, the move was due to technicals, not fundamentals.In other words, crude plunged below its key 200-day moving average, as well as below a major price trend-line, and this resulted in many large hedge funds being forced to sell to adhere to their risk-management policy.
Typically, crude inventories rise at this time of year, and the fact they have been falling is bullish. In fact, looking at the 10-year median, crude oil stocks do not typically start to decline until the end of May, which coincides with the start of driving season.
This should lead to much larger draws in inventories, and a much more bullish outlook on oil prices (especially if OPEC agrees to extend their production-cut agreement, which is widely expected).
Over the longer term, should demand hold up, several years of major underinvestment due to the oil price crash should lead to supply issues and should support prices if of course US supply stops increasing as it does the last 10 months.
TECHNICALLY POINTS
AS WE AT THE CHART WE ARE GOING TO FORM A BEARISH SHARK PATTERN
B POINT DOESN'T HAVE CERTAIN CRITERIA BUT IT'S MORE VALID WHEN PASS THE 50% FIB LEVEL OF XA
C POINT IS BETWEEN THE 1,13 AND 1,618 EXTENSION LEVEL OF AB
D COMPLETION POINT IS FROM 0.886 TO 1,13 EXTENSION LEVEL OF XA
AS WE CAN NOTICE THE COMPLETION D POINT IS AT PREVIOUS HIGHS AND RESISTANCE POINTS AT 53,90$ WITH THE MAXIMUM POTENTIONAL LEVEL AT 56$ OF 1,13 FIB EXTENSION
WE CAN ALSO SEE THAT THE "SHORT" TARGETS OF THE BEARISH SHARK PATTERN AT 38,2% AND 50% OF FIB RETRACEMENT COINCIDES WITH THE ASCENDING CHANNEL OF OIL PRICES AT 50,50$ AND 49,50$ LEVEL AND ALSO THE 200MA
POSSIBLE TRADES:
LONG TRADE:FIRST TARGET (T1) AT 53,90$ WITH THE 0.886 FIB RETRACE OF XA LEG
SECOND TARGET (T2) AT 56$ AT 1,13$ FIB EXTENSION OF XA LEG
STOP LOSS AT 44,30
SHORT TRADE AFTER D COMPLETION POINT:FIRST TARGET (T1') AT 50$ 38,2% FIB RETRACEMENT OF CD LEG
SECOND TARGET (T2') AT 48,80$ AT 50% FIB RETRACEMENT OF CD LEG
THIRD TARGET (T3') AT 47,50% FIB RETRACEMENT OF CD LEG
BUY STOP AT 53,30$ OR PREVIOUS HIGHS WHEN FORMED
THANK YOU FOR SUPPORT
HAPPY TRADING!!
Trade active
Note
Manipulated market a LOT lately but i believe why are on the right side of the market.Note
We can see a small pullback from the trend line.If we have good news on the inventory report it could validated and ride this ascending trend line.Note
That's nice behaviour.Bullish flag broken nice but we need as bulls to see 50$ per barrel.Trade active
Trade active
In trend line let's ride it from here.Trade active
Fundamentals going to work...Trade active
Trade active
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