WTI OIL Rising prices are here to stay for years to come

Understanding WTI Oil (USOIL) on the larger, long-term time-frames such as the 1W or 1M charts can broader your perspective and allow you to consider market dynamics that you never thought they were possible to affect the trend. From time to time we tend to make such studies in order to give you an idea of how the long-term trend may be shaped. Example of such pieces of publications include the following, where a slow down on the Oil rise allowed us to realize that inflation peaked and get a timely sell:


Or the following that got as a timely buy while the price was still at $69.20 to target $100 after a break above the 13 year Lower Highs Resistance:


** Why is Oil rising now? **
On today's study we look into the 1M time-frame and attempt to explain the current non-stop rise (completed 4 straight green 1M candles) that has taken most of the market by surprise. Let's start by acknowledging that it started on strong foundation as the 1M MA50 (blue trend-line) held on 3 separate tests. The 1M MA100 (green trend-line) that was formerly the Resistance (had 2 emphatic rejections on June and October 2018) since October 2014, has been holding as Support since the April 2021 bullish break-out.

** The MA levels, Inflation and comparison with DotCom **
At the same time it is the first time we have all three 1M MA50, 1M MA100 and 1M MA200 (orange trend-line) squeezed so close to each other since late 2001. That was during the DotCom Bubble burst. As you can see, the patterns of now and then aren't all that different. In our time the market is attempting a recovery from the Inflation Crisis, coming off a war and the generational COVID crash (that led to the inflation crisis of course). The 1M RSI fractals have started and peaked on similar oversold and overbought levels respectively, while holding on their strong corrections the 0.786 Fibonacci level. Similar situation with the 1M MACD, Oil is about to form the 2nd Bullish Cross of the fractal, placing us in relative time terms to the 2002 rise.

** Importance of MACD and conclusion **
Similar oversold 1M MACD Bullish Crosses were during the 2016 Oil crisis (May) and in the aftermath of the 2008/09 Housing Crisis (October 2009). As a result, in our humble view, if Oil completes that Bullish Cross, it will give the market a signal that the price will continue to rise for many years to come (unless of course a higher fundamental intervention takes place). In conclusion, this shouldn't surprise us, as Oil has risen along with stocks following such Bear markets.

Do you also expect rising Oil prices in the near future?

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