Crude Oil – Rising Wedge 15m

Hi all,

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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Crude Oil


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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.

 

 


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