Bent oil scenario- Break below 38.2% or Head and Shoulder
On the daily chart, we have two possible scenarios that could unfold -
Either prices could see a daily closing below $42.99 (38.2% of Jan low - June high) and drop to 200-DMA level of $42.35 or else
Prices could stage a rebound from 38.2% Fibo level of $42.99 and make a move towards $48.35 (50% Fibo of May 2015 high - Jan 2016 low). Amid growing signs of gasoline glut, a break above $48.34 appears unlikely, thus a right shoulder could be formed. The resulting head and shoulder neckline is seen around $42.80 levels.
Either prices could see a daily closing below $42.99 (38.2% of Jan low - June high) and drop to 200-DMA level of $42.35 or else
Prices could stage a rebound from 38.2% Fibo level of $42.99 and make a move towards $48.35 (50% Fibo of May 2015 high - Jan 2016 low). Amid growing signs of gasoline glut, a break above $48.34 appears unlikely, thus a right shoulder could be formed. The resulting head and shoulder neckline is seen around $42.80 levels.
