NOTE: this analysis is for the CLH7 (March) oil contract. Also, the path is hypothetical, targets/support/resistance are what matters. I believe that the 12/2 buying climax will hold as resistance.
1. Prices have been rejected at the daily BB midline and are below the daily 9 MA 2. TL of last two daily swing lows and the last daily selling climax are at approximately 51.66 level. 4. Daily bars showing declining peaks and troughs, indicating a potential reversal 5. I have found that .618 run ups are common in descending wedges; 1/12 high was approximately a 618 run up off of the 1/6 high 6. I am looking for a drop and potential bounce at the previous selling climax, 51.66 and .618 bounce to 53.2 level followed by breakdown of 51.66 and the overall distribution range; It is common in a keltner channel to see rejection at the midline prior to a break below, this would be in line with this hypothetical scenario; first target after breakdown = 50.00
Good trading all!
Comment
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Prices have shown further breakdown; keep and eye on the 12/7 and 1/10 demand leaves at 51.97 and 51.66; I would expect prices to bounce at the trend line; however if the trend line and lower demand break, i will expect further decline.