Technicals | Feb 23 2022
Bottom Line 22/02/22
Daily Trend: Neutral
Weekly Trend: Up
Monthly Trend: Up
Support Levels: $76.15 / $62.29 / $55.08 (April 2022 Contract)
Resistance Levels: $100.00 / $141.50
[All prices WTI futures US$/bbl]
Reasons to remain bullish longer-term:
→ oversupply a major issue in the past yet this has rebalanced in a post-Covid-19 environment
→ bounce off capitulation low in April 2020 has stayed robust to this point
→ Oil price wars between major country producers always remain in play
→ Elliott Wave count remains on track for higher levels looking ahead
Crude Oil’s highest open interest (O.I) is now with the April 2022 contract. The trend remains up as we continue to label our price chart as moving higher within a higher degree Wave-(3). And as this wave is of a higher degree we are expecting it to subdivide into an intermediate 5-wave pattern within itself combined with some further minor subdivisions along the way. Simply put, this is what bullish markets do.
So zooming in on the immediate move, our view is that an intermediate Wave-1 of (3) is now nearing completion although we do see the potential for yet another higher swing low pattern to trigger from here. Which will put the $100.00 price point on the radar. Yet as we mentioned in our video tonight, if price does tag $100.00 over the coming weeks, it is a strong line of historical resistance combined with it being a line of psychological resistance as most significant round numbers are.
Another notable point is that some strong-looking Type-A bearish divergence is now in play. With any swing higher from here potentially solidifying this indicator and creating some upcoming weakness. So combined with overhead resistance, price may now be getting close to locking in a Wave-1, with a corrective Wave-2 south to follow. Bigger picture though the uptrend is exceptionally strong here, so the longer-term bullish outlook continues to remain firmly in place for now.
We have a couple of U.S energy stocks active in our trading area at the moment which have been reaping the rewards of a bullish energy sector. In relation to the Crude Oil contract though, based on our review tonight, I would prefer to sit tight for now and see if we can be granted the anticipated breather over the coming days. Then look to see if we can latch onto a low-risk opportunity on the long side post the anticipated bout of weakness. Especially as from a bigger picture perspective, a larger equality move looking well ahead targets up towards $140.00.
Re-published with permission of the publisher. www.thechartist.com.au All copyright remains with the publisher. The above views expressed are not by association FNArena's (see our disclaimer).
This report may contain advice that has been prepared by The Chartist Pty Ltd (ABN 40 641 323 051). The Chartist Pty Ltd is a Corporate Authorised Representative (CAR No. 1282007) of Shartru Wealth Management Pty Ltd ABN 46 158 536 871, AFSL 422409. Any advice is considered general advice and has been prepared without taking into account your objectives, financial situation or needs. Because of that, before acting on this advice you should therefore consider the appropriateness of the advice having regard to your situation and your own objectives, financial situation and needs. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. If the advice relates to the acquisition, or possible acquisition, of a product (other than a security e.g. a CFD) then the client should obtain the relevant Product Disclosure Document and consider it before making any decision about whether to acquire the product. Past performance is not a reliable indication of future performance. This material has been prepared based on information believed to be accurate at the time of publication. Subsequent changes in circumstances may occur at any time and may impact the accuracy of the information.
Risk Disclosure Statement
THE RISK OF LOSS IN TRADING SECURITIES AND LEVERAGED INSTRUMENTS I.E. DERIVATIVES, SUCH AS FUTURES, OPTIONS AND CONTRACTS FOR DIFFERENCE CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CAREFULLY CONSIDER YOUR OBJECTIVES, FINANCIAL SITUATION, NEEDS AND ANY OTHER RELEVANT PERSONAL CIRCUMSTANCES TO DETERMINE WHETHER SUCH TRADING IS SUITABLE FOR YOU. THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN FUTURES, OPTIONS AND CONTRACTS FOR DIFFERENCE TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS. THIS BRIEF STATEMENT CANNOT DISCLOSE ALL OF THE RISKS AND OTHER SIGNIFICANT ASPECTS OF SECURITIES AND DERIVATIVES MARKETS. THEREFORE, YOU SHOULD CONSULT YOUR FINANCIAL ADVISOR OR ACCOUNTANT TO DETERMINE WHETHER TRADING IN SECURITES AND DERIVATIVES PRODUCTS IS APPROPRIATE FOR YOU IN LIGHT OF YOUR FINANCIAL CIRCUMSTANCES.
Technical limitations If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.
Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.
FNArena is proud about its track record and past achievements: Ten Years On