Technicals | Nov 30 2022
Daily Trend: Down
Weekly Trend: Down
Monthly Trend: Down
Support Levels: $90.00 – $80.00 (?) / $70.92 (Jan 2023 Contract)
Resistance Levels: $100.18 / $118.77
[All prices US$/bbl Nymex WTI futures]
Reasons to remain bullish longer-term (corrective phase still in play more immediately):
→ bounce off capitulation low in April 2020 has stayed robust to this point
→ Green energy vs Fossil fuel battles globally becoming heavily politicized
→ Elliott Wave count remains complex yet potentially still looking for higher longer term
It’s been a month since we last reviewed the big Crude Oil contract with the highest Open Interest (O.I) now with the January 2023 contract. It has remained in corrective mode since the March 2022 highs were locked into place, yet as we mentioned in our video tonight, things are starting to get quite interesting.
And by interesting, we mean that almost perfect ‘time symmetry’ is now in play, and when this occurs it is time to sit up and take notice as it may mean that buyers are getting ready to take an interest again.
The bullish impulsive move off the April 2020 lows took almost 2 years to complete, with the March 2022 highs locking in either a higher degree Wave-(1) or (A) high. Very generally speaking for patterns to remain bullish, especially larger patterns like we are observing here, corrective phases take about a third of the time of the previous move north to complete.
So this is exactly where we are now, and last night we witnessed some buyer interest coming in with price intraday tagging a lower low circa $73.60, yet closing towards its highs circa $77.24. Plus we had a rise in volume. So some positive price/volume attributes arrived last night, yet it is still only very early days.
Whether this corrective phase is a Wave-(2) or (B) doesn’t really matter either as both remain bullish looking well ahead (see video). Yet with typical Wave-(2) depth generally being more towards the 50.0% retracement zone aligned to $54.85, and with price action continuing to trade shallow just above the 38.2% pullback zone circa $69.85, we are leaning toward this move being a Wave-(B), as they are generally more shallow than Wave-(2)’s. Price is oversold on both the dailies and the weeklies now as well so not a bad place for buyers to start taking an interest again. It’s back on our watchlist.
Crude Oil is finally starting to grab our attention again from a trading perspective.
For mine, the trade trigger on the long side will be above $93.77 which will take price above the 7th November rejection bar, back out of the support zone, combined with breaking back above the 200-day MA which is presently acting as dynamic resistance.
Pre-breakout we would ideally like to see price acting impulsively as well. I’m not asking for much! No recommendation just yet although we could be getting close which means keeping a keen eye on your favorite ASX Oilers as well!
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 SECURITIES 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