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Do not trust the oil market rallyUS Oil Daily chart pattern - Inverse Head and Shoulder Neckline resistance: $51.80-$52.00 As we can see, the right shoulder is in progress. The rally from sub-40 levels has caught one and all by surprise. The reason for that is the fundamentals are not supportive. Just a couple of weeks ago there was widespread talk of oil market rebalancing being drowned in gasoline glut! However, things changed all of a sudden after Saudi minister announced an emergency meeting in September and was joined by Russia in triggering speculation of output freeze. To put it briefly - Oil has rallied on slippery floors/false premise. Gaurav Sharma, Oil Analyst, IB Times UK, detailed reasons for why he he believes the oil market rally could be short lived. Check out the segment titled "Do not trust the Oil market rally - IB Times" here - www.youtube.com Macro show at - www.tiptv.co.uk Key points “We've switched from a bear market to a bullish one, but do not trust the oil price rally; its being sold on a false premise which is why profit-takers are all over oil futures since start of the week” “Chances of oil producers agreeing to a production freeze appear slim, and even if they do - it'll be a phoney action as Russia & Saudi Arabia are pumping over 20m bpd between them” “Even for a short price uptick, the market would need a real terms cut of 1m bpd - all that'll do is support fringe North American plays and we'll be back where we are” “In any case, data suggest North American oil explorers have adjusted to the new normal of a $40-50/bbl oil price. That’s the range we're most likely stuck at for 2016”
NYMEX:CL1!
by TipTVFinance
6
WTI Oil – Eyes completion of Inv. H&S Weekly chart pattern – Inverse H&S with neckline resistance at $51.95 Daily chart – Money flow index is well into overbought territory, RSI is yet to hit overbought levels. Overall, it appears the prices are likely to stay upbeat, although overbought money flow index could take the wind out of the bullish momentum, thus leading to short-term sideways action around $46.-48 before a final sprint at neckline hurdle of $51.95 is made. Baker Hughes oil rig count number due today could make/break the current rally in oil prices. Check out why many London City experts believe the rally contradicts fundamentals in our show titled - London open: oil rally – shaky fundamentals, slope of hope - 17/08/16 Link - www.tiptv.co.uk
FX:USOIL
by TipTVFinance
Brent oil – Pullback likely before further rallyBrent’s five day winning streak has pushed ended up setting a bearish price RSI divergence on the hourly chart. The daily and hourly money flow index is overbought as well. We also have a breach of hourly rising trend line. However, the daily RSI is rising and is yet to hit the overbought territory. Hence, it is safe to anticipate a minor pull back in prices before $50.00 could be breached. The pullback could take prices to $48.80-$48.50.
FX:UKOIL
by TipTVFinance
Brent Oil – API inventory buildup weighsOil’s four –day winning streak came to a halt after US API reported a surprise inventory buildup of about 2 million barrels last week, which contradicted expectation of a one million barrel drawdown. Prices may drop to $44.40, but reckon the falling wedge support may hold and fuel a rebound given the daily money flow index has breached the falling trend. The daily MACD has turned positive as well which adds to the possibility of a rebound from $44.450 area. On the higher side, area around $45.68-45.74 is a strong hurdle which if breached would open doors for $46.22 levels (100-DMA).
FX:UKOIL
by TipTVFinance
US Oil – Eyes hourly 50-MA support at $40.23Oil’s rebound from the low of $39.24 following a bullish price RSI divergence on 4-hr chart and a move above $40.85 (23.6% of 46.06-39.24) suggests a temporary loss of bearish momentum, nevertheless, the fresh bear turn in the hourly MACD and RSI’s retreat from overbought territory indicates prices could take out $39.24 and test hourly 50-MA support seen at $40.23. Only a day end closing below $39.24 would indicate fresh sell-off towards mid-35 levels. On the higher side, only a day end closing above $41.85 would indicate short-term bearish invalidation.
FX:USOIL
by TipTVFinance
WTI Oil – Bullish price-RSI divergence, correction likely The bullish price RSI divergence seen on the 4-hr chart suggests prices could be heading higher to $40.85/barrel (23.6% of $46.06-$39.24) levels. Daily RSI has almost hit the oversold territory, while the daily candle has turned positive - green hammer. This adds credence to the view that prices may correct to $40.85. On the other hand, an hourly closing below $38.24 would signal failure of bullish price RSI divergence and open doors for further losses.
FX:USOIL
by TipTVFinance
3
Brent oil - Caution advised over 5-DMA Brent’s recovery from Friday’s low of $42.49 amid broad based USD sell-off appears a corrective rally and thus caution is advised as prices trade above 5-DMA level of $43.52, especially since the Baker Hughes data released on Friday showed increase in rig count for fifth straight week. Above 5-DMA, fresh offers could come-in and push prices back to $43 handle. A violation there could yield a drop to 200-DMA level of $42.14. On the higher side, only a day end closing above $44.93 would suggest a bottom is in place at $42.49. The next move higher then could be capped around $45.88 (July 11 low).
FX:UKOIL
by TipTVFinance
Brent oil – Next (possible) stop at 200-DMA supportBrent’s day end closing below $42.99 (38.2% of Jan low – June high) on Thursday suggests prices are on track to test 200-DMA support at $42.15 levels today. Daily RSI is yet to hit oversold territory, there are no signs of bullish divergence. Daily MACD remains bearish as well. A minor technical recovery was seen in Asia, but that is failing to hold prices above $42.99, thus adding to the bearish tone around oil. Bearish invalidation is seen only if prices see a daily closing above $45.00 levels.
FX:UKOIL
by TipTVFinance
WTI Oil outlook - scope for minor correctionOIl's sharp decline in the last few trading sessions and a break below $41.86 (38.2% Fibo of Feb low-June high) has left prices oversold as per the hourly RSI. The hourly MACD is seen turning the corner as well. Consequently, we may see a minor corrective rally to $42.60-42.70 (falling wedge resistance), where a failure could provide fatal and open doors for a fresh sell-off. On the downside, the major support is seen at $40.58 (200-DMA).
FX:USOIL
by TipTVFinance
Bent oil scenario- Break below 38.2% or Head and ShoulderOn the daily chart, we have two possible scenarios that could unfold - Either prices could see a daily closing below $42.99 (38.2% of Jan low - June high) and drop to 200-DMA level of $42.35 or else Prices could stage a rebound from 38.2% Fibo level of $42.99 and make a move towards $48.35 (50% Fibo of May 2015 high - Jan 2016 low). Amid growing signs of gasoline glut, a break above $48.34 appears unlikely, thus a right shoulder could be formed. The resulting head and shoulder neckline is seen around $42.80 levels.
FX:UKOIL
by TipTVFinance
Brent oil – bearish break from falling wedgeBrent’s bearish break from falling wedge pattern seen in the daily chart confirms a trend reversal and opens doors for a test of 200-DMA of $42.233 levels. However, a major breakout is usually followed by exhaustion and a re-test of selling interest around the breakout level. Hence, we may see Brent peep above the breakout level of $45.08. A failure to take out to do so/take out $45.08 followed by a drop below Asian session low of $44.67 could yield a move to $42.33 (200-DMA). Bearish invalidation is seen only if prices move back inside falling wedge on daily closing basis.
FX:UKOIL
by TipTVFinance
Brent oil – bulls need a symmetrical triangle breakoutBrent’s rebound from yesterday’s low of $45.88 and move higher on the back of bullish inventory report if results in a bullish break from symmetrical triangle formation on the hourly chart would yield a fresh rally to $48.44 levels. On the flip side, failure to see a bullish break would once result in a sideways to choppy trading. On the lower side, only a day end closing below falling wedge support would suggest the retreat from June high has resumed.
FX:UKOIL
by TipTVFinance