Short STOXX EUROPE 600 OIL & Gas sectorWe are having here a very well structured trade idea, exploiting the confluence of high important technical factors, mean reverting stance, and extreme positioning in the Oil and Gas space thanks for a Long Inflation lean by most investors this year.
Into year end and preparing for 2023, Fact is that after such a good performance some will be tempted to take profit especially with a potential FED pivot in [/b preparation based on Inflation peaking.
Saying it simply and pragmatically : if you made money being long the sectors or High dividend stocks in that space, that's a great achievement, but the forward looking factors are clearly pointing lower.
the USD price action is clearly indicating of Inflation peaking and is highly supportive of this trading idea.
Bottom line: Sell / Short SXEP Sector using this Multi Month horizontal trendline and overbought technical indicators
Tacticalview
BTC-DAILY-RSI BULLISH DIVERGENCE..BUT !Yesterday's price action (long black candle - BEARISH ENGULFING !) which pushed sharply down the BTC towards a low of 37'701 (nearly filling the TRIANGLE TARGET @ 37'581), triggered a BULLISH DIVERGENCE...
Therefore, on short term and it'is exactly what is going on, a recovery should take place; nevertheless and in order to confirm a TACTICAL REVERSAL, the BTC should recover and close on a daily basis, at least above the middle (39'295 of the yesterday's long black bearish candle which is also by the way the area of the former daily support congestion !
This only will be the first step of this potential recovery as, as long as the BTC does not make a closing level, above the closing level (40'440) of the last white bullish candle, the trend will not change and the downside risk will remain !!!
LAST BUT NOT LEAST IN THIS DAILY PICTURE, THE BTC IS WELL BELOW THE BOTTOM OF THE CLOUDS RESISTANCE AREA WHICH IS ALSO CONFIRMED WITH THE LAGGING LINE...
CONCLUSION. :
ANY RALLY, FOR THE TIME BEING SHOULD BE SEEN AS A CORRECTIVE MOVE ONLY (TACTICAL COUNTERTREND PRICE ACTION) AND NOT AS STRATEGIC REVERSAL YET; THEREFORE, ANY TACTICAL LONG POSITION SHOULD BE MONITORED VERY CAREFULLY AND MANAGED WITH STOP LOSS ACCORDINGLY !
KEY LEVELS IN THIS DAILY TIME FRAME ARE RESPECTIVELY :
DOWNSIDE : 37'000 (ONGOING PRIMARY UPTREND SUPPORT LINE)
UPSIDE : 40'500-40'800 (FORMER HIGHS)
IMPLICATIONS :
DOWNSIDE BREAKOUT OF THE PRIMARY UPTREND SUPPORT LINE :
A failure to hold and close on a daily basis above the 37'000 area would be seen as a NEGATIVE SIGNAL, calling for lower levels towards 34'325 (February low) ahead of 32'950 (January low)
Then, below the 30'000 area (psychological support) and last but not least THE VERY IMPORTANT KEY STRATEGIC SUPPORT @ 28'600 (double top trigger level !)
RECOVERY ABOVE THE FORMER HIGHS (40'500 - 40'800:
A successful recovery and a closing level above this area would momentary neutralise this ongoing downside risk and put again the BTC in a TACTICAL UPTREND.
IMPORTANT TO NOTE THAT THE PRIMARY DOWNTREND LINE RESISTANCE IS CURRENTLY @ 45'600
4 HOURS
RSI BULLISH DIVERGENCE CONFIRME BY A BULLISH ENGULFING PATTERN
R1 : 38'500
R2 : 38'917
R3 : 39'717 (38.2% FIB RET 42'979 -37'701) and also the middle of the long black bearish candle seen yesterday afternoon (40'484-38'572 !)
On the downside a failure to stay and close (H4 closing basis) above the recent low @ 37'701 would reactivate the downtrend and put the focus towards the levels previously mentioned in D1
1 HOUR
RSI school case ...
On April 25th we saw a BULLISH DIVERGENCE which trigger a move from 38'202 towards a high of 40'800 (first top)
Then a second top also @ 40'800 which triggered this time a BEARISH DIVERGENCE which pushed the BTC down again from 40'800 towards a low of 37'701.
Finally this morning a BULLISH DIVERGENCE took place (potential double bottom with its trigger level @ 38'462)
WATCH ONGOING PRICE ACTION AS AN HOURLY CLOSING above 38'462 WOULD ACTIVATE THIS DOUBLE BOTTOM FORMATION FOR A TARGET @ 39'223, which roughly match with the KIJUN-SEN (or base line), currently @ 39'250
A failure to activate this double bottom in progress would put again the BTC under selling pressure with the focus on the former low of 37'701.
As usual, monitor closely price action from intraday short term time frames to longer time frames which will help you to catch early and intermediate validation or invalidation signal of what has been mentioned in longer (DAILY and 4 hours time frames)
Have a nice trading day.
Any comment are more than welcome.
Regards
IRONMAN8848 - Jean-Pierre Burki
BTC - H4 - AT A CRUCIAL LEVEL !H4 : Last long black candle triggered a BEARISH ENGULFING PATTERN,
with a closing level below MBB, TS and KS !!!
Moreover, for the first time the closing level of this time frame was
also below the tactical uptrend support line.
In addition, technical indicators do not show recovery signal (s) yet.
Watch H1 price action for validation or invalidation of this ongoing bearish
price action calling for lower levels towards the clouds support first.
Interesting to note that the former congestion support zone seen between
Feb 10th and 17th (49326-46872) coincides with respectively the 61.8% and 78.6 %
Fibonacci retracements.
Watch very carefully price action around the clouds as a breakout of that area would
likely trigger a strong sharp selloff !!!
BTC - H1/M15 - TRADING IN THE ZONE - AT A GLANCEH1 : Failure to recover and and hold above the ongoing downtrend line resistance and MBB triggered further selling pressure !
Last closing candle was below former low closing levels and below
MBB, TS and KS !
No signs of any reversals in all indicators
Watch next H1 closing for validation or invalidation of the ongoing bearish price action
M15 : Last M15 closing was below the clouds !
Ongoing rebound attempt, indicators are slightly turning up...
Watch next M15 closing for validation or invalidation.
In order to neutralise the downside risk, BTC should quickly recover above MBB, currently @ 53148
A failure to do it would confirm that recent pullback attempt was only a corrective move in a tactical
ongoing bearish price action.
BTC - D1 - LONG BLACK BEARISH CANDLE IN PROGRESS...D1 : The ongoing bearish tactical price action is currently triggering a long black bearish candle...
In addition the first significant support is now, not far away, TS @ 52134
A failure to hold above this important support level, would likely trigger further downside move in a
acceleration phase mode, putting the focus on the 23.6% Fib ret @ 51379 ahead of the psychological support level of 50000.
As long as we stay above the Mid Bollinger Band and the strategic support trend line, recent and current price action should
be seen as a consolidation & corrective move in a broad bullish trend.
A breakout (confirmed) of 46500 would then switch from a BULLISH strategic view to a BEARISH one !
On the upside, in order to neutralise the ongoing bearish price action, BTC should quickly recover an hold above 55920, which was
the yesterday's opening level of the former white bullish candle.
BTC - M15 - TRADING IN THE ZONE - AT A GLANCE !M15 : Watch Mid Bollinger Band as leading indicator and very short term downtrend line resistance.
Interesting to note that the 61.8% Fib ret coincides also with the clouds resistance zone.
On this time frame, a recovery and, if hold above the clouds, would neutralise the current ongoing bearish price action.
Watch M5 for intermediate signal (s)
All the best my friends.
BTC - H4 - WARNING MBB UNDER ATTACK !H4 : Recent price action is showing an attempt to breakout the Mid Bollinger Band support (wait for confirmation !)
Indeed, from the recent top we can see 2 bearish black candles and the ongoing candles will validate or invalidate the
ongoing tactical bearish price action which is for the time being in a 58350-54500 trading range.
If MBB hold once again, it is likely to see a recovery, opening the door for a retest of former highs.
Warning : a failure to hold above KS @ 54490 would trigger a downside acceleration which may put the focus on the
tactical uptrend suppor line, currently around 51500
Technical indicators are not showing any recovery yet !
Watch shorter time frames (H1,M15 and M5) to get intermediate signals
Have a nice trading day.
And last but not least, if you find my analysis bring you some additional value on your trading decision, do not hesitate to like it and to add me on your following list :-)
