Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Where Is the Price of Crude Oil Price Going?

Commodities / Crude Oil Nov 25, 2014 - 09:50 AM GMT

By: Nadia_Simmons

Commodities

Trading position (short-term; our opinion): Long positions with a stop-loss at $72.78 are justified from the risk/reward perspective.

On Friday, crude oil gained 0.47% as Thursday's solid U.S. data and talks that OPEC may consider trimming production continued to support the commodity. As a result, light crude left the recent consolidation and closed the day above $76. Will we see a rally to $80 in the coming days?

On Friday, crude oil climbed to an intraday high of $77.83 as the combination of solid U.S. data continued to support the commodity. How did this increase affected the very short-term picture of crude oil? (charts courtesy of http://stockcharts.com).


From the medium-term perspective, we see that the situation hasn't changed much as crude oil is still trading above the key support created by the 50% Fibonacci retracement based on the entire 2009-2011 rally.

What can we infer from the very short-term picture?

In our previous Oil Trading Alert, we wrote the following:

(...) The first thing that catches the eye on the daily chart is an invalidation of the breakdown below the previously-broken lower border of the declining trend channel. Although we saw a similar price action in mid-Nov, this time oil bulls managed to push the commodity not only well above this support line, but also above the upper border of the consolidation (marked with red). These are strong bullish signals, which suggest further improvement in the coming days.

Looking at the above chart, we see that oil bulls pushed the commodity higher as we expected. As a result, crude oil bounced off the upper line of the consolidation and approached the Nov 12 high. Although light crude gave up some gains, it still remains above the consolidation range, which means that as long as there is no invalidation of the breakout further improvement is likely. How high could light crude go? We think that the best answer to this question will be our last commentary:

(...) Taking into account the breakout from consolidation, crude oil will likely climb to around $79.50, where the size of the upswing will correspond to the height of the formation. At this point, it's worth noting that this target is in a solid resistance area where the upper line of the declining trend channel, the previous lows and the barrier of $80 are. Therefore, we think that further rally will be more likely, if we see a breakout above this zone. In this case, the next upside target for oil bulls would be around $81.68, where the 38.2% Fibonacci retracement based on the Sep 30-Nov 14 decline is. (...) the CCI and Stochastic Oscillator generated buy signals, supporting the bullish case.

Summing up, we are convinced that keeping long positions (which are already profitable) is still justified from the risk/reward perspective as crude oil broke (and closed the day) above the upper line of the consolidation and buy signals generated by the CCI and Stochastic Oscillator remain in place, supporting further improvement.

Very short-term outlook: bullish
Short-term outlook: mixed with bullish bias
MT outlook: mixed
LT outlook: bullish

Trading position (short-term; our opinion): Long positions with a stop-loss at $72.78 are justified from the risk/reward perspective.

Thank you.

Nadia Simmons

Sunshine Profits‘ Contributing Author

Oil Investment Updates
Oil Trading Alerts

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Nadia Simmons and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Nadia Simmons and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Nadia Simmons is not a Registered Securities Advisor. By reading Nadia Simmons’ reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Nadia Simmons, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in