Today, I would like to share my ideas about Crude Oil (WTI) market. It looks interesting in long run and now it can provide interesting buy opportunities.
The daily chart gives us trend reversal signals which are based on: - bullish divergence - a breakout above the downtrend line - iH&S chart pattern which is not perfect but still it can be used (why it's not perfect? I don't like the size of the right shoulder, it should be based on the deeper swing low)
All these trend reversal signals came after the price could bounce from 50.00 important support level. The reversal model looks too close to the perfect one.
If we look at indicators: - MACD lines support the upward movement - MACD histogram tells us about a possible correction in the format of the upward movement - DMI became bullish but ADX line falls = bulls are not strong now. We can think about buying based on additional signal confirming the upward movement.
If the price breaks the neckline of iH&S, this pattern will be confirmed as a reversal one. If the price moves above 54.00 resistance level, which acts as a signal level for confirmation the upward movement, it will be possible to open long positions for the long run.
Stop orders should be placed below the right shoulder. Profit targets should be at the resistance levels.
Alternative variant: the price bounces from 54.00 level and drops below the right shoulder. If so, we should be ready to see an attempt to reach the previous swing low at 50.00 support level.
Sorry if this is a double (or triple!) post. Just wanted to say thank you for all of your analyses. I have gained quite a bit of knowledge following your information. Thank you for sharing!
DLavrov
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@k34733, thank you for your comment! I'm glad that it's helpful! Knowledge is the key to profitable trading)
Looks interesting! The fall from 75 to 40 was way too much in my opinion. The correlation to the stock market is also very high.
Dani0
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@Grandmaster_Nitemare, Not realy if you ook at the channel up it was breaking down, that channel began at 42 region and market did full breakdown on it, doesnt always but this time it did.
DLavrov
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@Grandmaster_Nitemare, yes, the market has some space for the upward movement. Even it's based on TA only. IF FA also provides support, we will be able to see a new uptrend.