I hope you had a nice and profitable trading week.
In this post I will discuss my current thesis on Crude Oil and what price levels are relevant to determine the next move.
Enjoy your weekend!
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1. Crude Oil 15m Chart
Rising wedge, bearish reversal pattern 15m chart.
A break below $52.25 triggers $52.09 and $51.70.
A break > $52..36 triggers $52.50.
2. Crude Oil Daily Chart
Since the start of 2017, Oil is in a Pattern of Lower Highs and Lower Lows nicely trading between the green trend channel. At the end of February, Oil had the chance to break out of the green trend channel but the $55 seemed to much of a burden to break through and it dropped into the mid 40’s mid March. Three hammers follwed and a new short term uptrend into resistance area $52-55.
The Daily Chart shows clear and strong resistance in the $52-55 area and of course the previous High @ $55.21 is a key level to trigger new upside potential. For now, I’m bearish on Oil as long as it is not able to close above previous Highs. What I’m basically waiting for, is a break below $52 support, providing short term confirmation that Oil is likely to retest $48.5 and maybe even $45-44 over the period mid May- mid June.
I played Oil on the long side, as it formed several Hammer Candle Stick Patterns (see black ellipse mid March – end of March). I closed these trades at a decent profit and now I’m bearish again, waiting for a break < $52, as confirmation to add short positions. Stop Loss = Higher High > $55.21. A break > 55 and $58 is activated as price target.
3. Crude Oil Weekly Chart
The Weekly Chart of Crude Oil shows an uptrend since early 2016 with Higher Lows and Higher Highs but since the start of 2017, Crude Oil has shown Lower Highs and Lower Lows. So since the start of 2017, Crude Oil is still in a downtrend/bearish pattern as long as it fails to break above the $55.21.
Last week, the price of Oil surged 4% and faced resistance from the trendline at the $53 area.
If Oil is not able to close above the $53-55.5 resistance area in the next week(s), then it becomes more likely to expect a retest of support at $48 and maybe even a retest of levels below $45 during the next cycle windows mid March and mid June.
Summarized: there’s strong resistance in the 53-55.5 area. If that fails to break to the upside, then expect a retest of $48 and $45 over the next couple of weeks.
Click here to read more about my Two Strategies: Contrarian vs Trend following.
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The following documentary shows 3 Cycles of Time that have a direct impact on our lives and investment decisions:
- Global Warming and the next Ice Age to come. CO2 will be reduced significantly, same as every cycle has happened so far.
- The bond market will collapse, interest rates will go up and stocks will boom.
- The cycle of wars, approaching the climax near 2020.
Although I saw this documentary for the 1st time today, it perfectly aligns with my view on how we should invest for the next couple of years:
Check out the Documentary here: Documentary “Missing Links – The Cycles of Time”