Thursday, July 30, 2015

WTIC Oil Weekly Chart

There is lots of interest in the oil charts. Price is collapsing over the last month from above 60 down to 47, a -22% crash (reversing the +20%+ springtime rally). Last summer oil peaks above 100. The tight white standard deviation bands squeezed-in for a huge move on tap. The bears win with the big move to the downside. Oil price bottoms early this year with a W pattern bottom. The bottom of the W is 40 and top of the W is 51-53 that targets the 60-64 area that was achieved.

Price violated the lower standard deviation band on the way down so a move to the upper band occurs in May so a move to the middle and perhaps lower band is on tap next and price is nearing the lower band (red dot). The chart indicators are weak and bleak except for the stochastics that are oversold wanting to see a bounce in oil price. Further lows appear on tap after any bounce, however, if price comes down to the 40-ish level at the prior lows, the light green lines should hold exhibiting positive divergence. Therefore, those expecting a big plunge in oil with 30 coming fast will likely be disappointed.

Oil prices will likely stagger sideways through the 40-52 range perhaps through the end of the year. Deflationary pressures should continue with ongoing less demand and more supply in a slowing global and Chinese economy, however, Middle East war and other geopolitical factors act as a counterbalance. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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