Thursday, May 12, 2016

WTIC West Texas Crude Oil Daily Chart Golden Cross Rising Wedge Negative Divergence

WTIC oil prints a golden cross with the 50-day MA rising above the 200-day MA; a bullish chart pattern. As Keystone often says, however, typically a pull back occurs in price when a golden cross occurs and typically a rally when the death cross occurs. This is due to many weeks of trending price action that needs to take a rest once the golden or death crosses occur. If the golden cross remains in play then prices will be higher in the weeks ahead after a short term pullback.

The energy sector, XLE, prints a golden cross last week. Brent oil will likely print its golden cross in a couple days. OIS printed the golden cross three weeks ago. XOM printed the golden cross in early March and CVX printed the golden cross in March as well.

The red rising wedge is a bearish pattern. The red lines show negative divergence in place so oil prices would  be expected to roll over in this daily time frame and target the lower trend line of the rising wedge. The green lines show the falling wedge, oversold conditions and possie d that launched price off the February bottom.

The weekly chart would like to see higher highs in oil price after the negativity in the daily time frame plays out say over the coming days or week or three. The monthly chart is also open to higher highs in price on the monthly basis. Thus, on the daily chart above, a pull back in oil to say 44 is on the table but about 3 or 4 weeks from now, say early June, oil prices will likely be back up to current levels at 46-47. Oil price may tease 48-52 for the coming few months which may hold as the high for the year. Keystone has no position in oil currently. 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.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.