Oil chart is looking interesting.
There is a lot of media talk of oil being at a seven year high and oil is going to $100 per barrel however from a technical standpoint there is a confluence of headwinds that may see a pull back at ~$90 level within the next few weeks. Perhaps $100 may be on the cards for later in the year but from what I'm currently seeing in the charts, it points towards a pull back in February.
My attached analysis shows:
- Approaching overhead long term resistance which has had three rejections since 2008.
- Approaching to the top of the pricing channel that Oil has been trading in since the oil price collapse during COVID, the top of this channel has also been rejected three times.
- RSI is forming a new bearish divergence.
The past two touches of the top of the pricing channel have seen 20% - 25% sell off's and both times landing / finding support around $62. I wouldn't be surprised if we saw something similar to this again, which would bring us through to March or April before Oil price is confirmed as moving off the support and back upwards again. Interestingly this timing is close to consistent with a seasonality pattern in Oil which historically shows May and June as very strong positive months for Oil......perhaps that is when we will see the break of the $90 resistance level.
There is a lot of media talk of oil being at a seven year high and oil is going to $100 per barrel however from a technical standpoint there is a confluence of headwinds that may see a pull back at ~$90 level within the next few weeks. Perhaps $100 may be on the cards for later in the year but from what I'm currently seeing in the charts, it points towards a pull back in February.
My attached analysis shows:
- Approaching overhead long term resistance which has had three rejections since 2008.
- Approaching to the top of the pricing channel that Oil has been trading in since the oil price collapse during COVID, the top of this channel has also been rejected three times.
- RSI is forming a new bearish divergence.
The past two touches of the top of the pricing channel have seen 20% - 25% sell off's and both times landing / finding support around $62. I wouldn't be surprised if we saw something similar to this again, which would bring us through to March or April before Oil price is confirmed as moving off the support and back upwards again. Interestingly this timing is close to consistent with a seasonality pattern in Oil which historically shows May and June as very strong positive months for Oil......perhaps that is when we will see the break of the $90 resistance level.