#202426 - priceactiontds - weekly update - oilGood Evening and I hope you are well.
wti crude oil futures
Quote from last week:
bull case: Strong week by the bulls with 3 pushes up but still a lower high. Their next target is to get back above 80.22. Right now they have momentum going but big down, big up mostly creates confusion and that means trading range. Above 79.5 I will probably long for 80. They need to stay above 77 or odds favor a retest of the lows below 74.
comment: Bulls just had amazing follow through since Monday and have bought everything on lower volume. The tight bull channel is valid and Monday or Tuesday could set up another good buying opportunity. I don’t think bears want to die on that 82 hill and bulls can bring this easily back to 82.5 or 84.5 where two upper bear trend lines run through.
current market cycle: big trading range or smaller bull trend inside of it. Triangle is still playing out.
key levels: 72-84
bull case: Another very strong week. Can only look for longs in oil currently, until bears show up again. Bulls had two big legs up and want a third one to around 83.5/84.5. The current pullback could continue 1-3 days before more up but bulls should not let it break the lower bull channel around 79.7ish
Invalidation is below 79.5.
bear case: Bears clearly see the pattern and only doing small intraday scalps until the market get’s nearer to either bear trend line as drawn. The big one started 2 years ago, so you can be sure, there will be a reaction. Not saying bears will be strong enough to reverse it directly but at least stall it around that price area. As of now, bulls are in full control and far above the daily ema. Don’t look for shorts unless strong momentum.
Invalidation is above 82.1.
outlook last week:
“short term: Neutral right under the bear channel line and daily ema at 77.5. Can break to either side.”
→ Last Sunday we traded 78.45 and now we are at 80.73. Not a good outlook but I would always write the same. As strong as it was before last Monday, it was the high of the trading range and it could have been the top for some days.
short term: More sideways to down movement expected (not much down, max 79.7ish) before bulls try the third leg up. Can’t be anything but bullish looking at this chart until bears build bigger selling pressure.
medium-long term: We are seeing the big triangle playing out between 72 and 82/84. The high of the triangle got tested until mid of April and we have now tested the lows around 72.5. Market did indeed reversed hard over the past 3 weeks and we are almost at the top of the triangle again, where I expect more sideways movement until one side clearly wins again. Odds favor the bears if they stay below 85.
current swing trade: None
chart update: Bear channel was clearly broken and therefore removed. Tight bull channel with a 5-wave series added.
