Oil - A Quick break before heading north
Weekly Chart:
Since ATH of $ 145 a barrel from 2008, we can draw a solid Down Trendline which penetrated for the first time on September 2021 (13 years).
Note the 4 aesthetic points of resistance, whom adding more power to this significant trendline.
This break of the trendline, by itself, tells us that something is changed - or at least, the trend might be reversed upward.
Moreover, Fundamentally wise, we can't forget the huge increase in money supply (50%) which took part in the lase 2 years - This factor by itself serves a quite confident argument why inflation will still be present in the near future, and what are the implications of such act on commodities prices.
What I mean is that the platform for high prices is set and done, and now what the economy needs is the reasons for new price rallies in practice - and trust me, there are going to be various of those (Covid, Wars, Supply chain problems, etc).
The last Intermediate Rally:
And indeed, we are not surprised to see the last upward burst (whatever the reason might be.., in this case - the russia-ukraine war) as a positive sign of continuation.
The last Minor rally from 91 to 130, was a good bargain for those who positioned themselves before the war.
The last Minor rally:
But the Long party is far from over, and The Oil Train is about to give new opportunity for those who want to travel north.
Daily Chart:
Zooming into the Daily Interval, the tactical picture becomes much clearer:
1. Successive price movement throughout Major Resistance levels: 84.48, 91.41 - Clear sign of strong Buyers.
2. Penetration of the ascending Blue Line (tops) - which serves as a preparation signal for long trade.
3. Fibonacci level of 40% which sets harmonically with the ascending Blue Line - a decent place to take a Long Position when the right signal arrives.
Tactical Keys:
What we want to see is some sort of Reversal Candle which takes place on the Ascending Blue Line as a form of Support (Between 90-100).
When and if such a signal arrives, a proper Stop Loss should be placed 5% below the Low of the new higher expected Bottom.
The first target is 145 - ATH.
Reversal:
If somehow the Russian-Ukraine negotiations are progressed for the good, and somehow the Russia commodities market back to the game (Very low probability) - we might suffer a huge decrease in prices for the near term, or at least, a stagnation.
In such case we want to wait for the price to draw us a clear tactical picture again, and wait for a qualitive trade opportunity.
Since ATH of $ 145 a barrel from 2008, we can draw a solid Down Trendline which penetrated for the first time on September 2021 (13 years).
Note the 4 aesthetic points of resistance, whom adding more power to this significant trendline.
This break of the trendline, by itself, tells us that something is changed - or at least, the trend might be reversed upward.
Moreover, Fundamentally wise, we can't forget the huge increase in money supply (50%) which took part in the lase 2 years - This factor by itself serves a quite confident argument why inflation will still be present in the near future, and what are the implications of such act on commodities prices.
What I mean is that the platform for high prices is set and done, and now what the economy needs is the reasons for new price rallies in practice - and trust me, there are going to be various of those (Covid, Wars, Supply chain problems, etc).
The last Intermediate Rally:
And indeed, we are not surprised to see the last upward burst (whatever the reason might be.., in this case - the russia-ukraine war) as a positive sign of continuation.
The last Minor rally from 91 to 130, was a good bargain for those who positioned themselves before the war.
The last Minor rally:
But the Long party is far from over, and The Oil Train is about to give new opportunity for those who want to travel north.
Daily Chart:
Zooming into the Daily Interval, the tactical picture becomes much clearer:
1. Successive price movement throughout Major Resistance levels: 84.48, 91.41 - Clear sign of strong Buyers.
2. Penetration of the ascending Blue Line (tops) - which serves as a preparation signal for long trade.
3. Fibonacci level of 40% which sets harmonically with the ascending Blue Line - a decent place to take a Long Position when the right signal arrives.
Tactical Keys:
What we want to see is some sort of Reversal Candle which takes place on the Ascending Blue Line as a form of Support (Between 90-100).
When and if such a signal arrives, a proper Stop Loss should be placed 5% below the Low of the new higher expected Bottom.
The first target is 145 - ATH.
Reversal:
If somehow the Russian-Ukraine negotiations are progressed for the good, and somehow the Russia commodities market back to the game (Very low probability) - we might suffer a huge decrease in prices for the near term, or at least, a stagnation.
In such case we want to wait for the price to draw us a clear tactical picture again, and wait for a qualitive trade opportunity.
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