OIL - Weekend analysis

FX:USOIL   Crude Oil (WTI)
1744 36 31
This week Monday the correction started in oil             from the 300 EMA . It's not such an important level but the previous rally couldn't break it through.

Candles, patterns, volume & EMA
We had 2 big red candle day : one of them below the average volume and next day above the average.
The 2nd day price closed below the 10 EMA . When price is closing below the 10 EMA in most of the cases the decline continues. So Wed was important: but look what happened with a very high volume we closed on the 10 EMA without tagging the 20 EMA . That was a bullish sign to me . The following 2 days' volume has increased and bears were fighting hard shorting oil             day after day but we were just crawling on the 10 EMA without breaking it down again.
This time the resistance was the 300 SMA from where we turned down every day.
Watching the volume and my EMAs oil             is still bullish to me.

From the main indicators the only weak is the MACD . It crossed down and has divergencies.
RSI left overbough but turned up from 50 which shows relative strength it wants to run to overbought again.
Slow stochastic seems wants to cross over again and enter into the overbought zone.
True strength index hasn't crossed over yet.

Daily cycle
We are on day 23. The last cycle topped on day 28 and it was quite an early top. So we will have around 2 more weeks while oil             will rally - even if we have 3 daily cycles in this intermediate cycle.

Summary : I still think oil             will reach 50$+ in this daily cycle. I don't suggest to " bet the farm on it" buit you can use this as buying the pullback in the oil             shares which can produce greater profit than going long in oil             future contracts.
ERX looks beautiful, or as I mentioned the individual shares like CLF             , SXE             , VALE are looking good to buy again.

So when I set LONG in oil             it doesn't mean I'm opening a long position now. I'm long since 30$. I'm holding my longs right now and i will post when jump out of them.

Comment: The hourly chart's 300 EMA is a very strong resistance now.
That might be our launch pad for the daily cycle top at 50$.
Comment: We are testing the 300 EMA again.
Comment: We are in the support zone.
Should be reversing from here.
Comment: It seems holding oil was the good decision again. We might be ranging for a few more days before starting to rally again. Today we just bounced from the 20 EMA and regained the 10 EMA again.
I hope now you understand why it is useless to try to short this market. When you jump into the short position the next day price just reverses and you are sitting in a nice loss...
Just as I predicted as soon as stocks starts to rally oil will follow.
Thanks for the update. Very useful. I have unfortunately been short since $42 (mistake) and have been using your analysis, together with my own - balancing and taking profits up towards $50. I think then we'll either have a path to $60 or it will head back down. All the way, as long as I'm balancing. Should see some profit taking at either end.
Really useful to read your updates and line them up with other analysis! Keep up the good work.
chartwatchers PRO CheeseManTrader
Thank you for your support.
EnzoCaluzzi chartwatchers
non ritiene possibile la figura ben chiara del testa e spalla ribassista che potrebbe nascere. molti sono pessimisti riguardo s&p non solo per quest'anno ma soprattutto per il prossimo,lei cortesemente mi ha detto di vederlo positivo nel breve ma a medio lungo puo' sbilanciarsi
It can't bet a head and shoulders pattern. Maximum a double top.
+1 Reply
chartwatchers PRO chartwatchers
It can't be a head and shoulders pattern. Maximum a double top.
silar.sk3 chartwatchers
nice sir
Thank u Chart for you analisies!
Okay so now a bit positive Bull news International rig counts; 2016
Latin America Europe Africa MiddleEast AsiaPacific Total Intl. Canada U.S. TotalWorld
Jan 243 108 94 407 93 1045 192 654 1891
Feb 237 107 88 404 182 1018 211 532 1761
Mar 218 96 91 397 183 985 88 478 1551
Apr 203 90 90 384 179 946 41 437 1424

In addition; yesterday Canada has suspended 40% of their production which amounts to a 1 million barrels a day. All workers that provide services to the Fort McMurray tar sands, the thrid largest oil field in the world, have no place to live everything burned to the ground. It is expected that the hub will be out of production for weeks.

Weekly rig counts for North America 457 to 451 only the Permian Basin (Texas) and Mississipian Basin added rigs (May values)
+2 Reply
I also happen to believe we are building a W pattern on the 4 hr chart just like we did back in Jan/Feb albeit smaller. If right this would indicate a strong green candle Monday.
tbuckle PRO MMadryga
if a W pattern do you think we need to head down .50 to a 1.00 before we form the last part of the W?
Hello Chartwatchers, you seem very knowledgeable could you please give me your opinion on the dismissal of Al-Naimi? Or anyone else on this thread that has thoughts about whether the dismissal is bullish or bearish for oil. Thoughts?? Thank YOU!!!
+1 Reply
Any news that causes volatility such as fires, change in power, changes the market.. This looks bullish for the short term
Hi Chart...when do you think that oil will reach 50$?its possible to reach this price during next week??in case oil reach 50$ do you suggest To hold all long positions or sell??thanks a lot
chartwatchers PRO jackcrudeoil
I think next week we will hit 50. We have to see in real tiime how we reach that price.
My original plan was to exit at 50. The question is :
Willthere be one more daily cycle in oil in this intermediate cycle or not.
If we have 3 daily cycle as i posted we shoul get out at 50 and get back at 44. If there is only 2 DC then
the top will be higher than 50. I will try to catch the top.
This is a great analysis, thanks.
I Think that this news: "Iran says ready to join oil freeze plan" can help to get to 50$
This is really good for us. Something is definetely happening. We were not able to close below the 10 EMA.
silar.sk3 chartwatchers
buy crude 43.30 is it ok
TamerFawzy chartwatchers
What would be a good entry for a long position here?
I would enter ERX or XLE here not OIL futures.
I'm still holding my long positions but we are at the half of this intermediate cycle.
Oil shares and ETFs could make a huge run here.
Im not long on oil ETFs yet (nor short of course). What is you opinion, would I buy them right away or rather wait for the second cycle´s bottom ? Thank you.
chartwatchers PRO andrej123456
I would buy a second cycle bottom. Or you could buy ERX or XLE.
Or some individual shares right now. Such as SXE, CLF, VALE, OAS I think they will have a nice bounce.
+1 Reply
So many indicators....and you forgot the most important signal...price action.
Time will prove you´re wrong...
Sorry Chart....300 EMA in which timeframe? Daily?
+1 Reply
by strong resistance... do you also mean 'support' ...?
webmiztriz PRO webmiztriz
**the 300 ema
webmiztriz PRO chartwatchers
Hi Chart . Oil Short
I don't like the oblique chart patterns.
So if I have to say a pattern I would say a double top or a cup &handle.

The problem even if it's breaking down there is a very little chance to get a follow through : we are at the half of this intermediate cycle.
So the worst could happen that we are entering a range between 42-46 for weeks. I will have at least one more possibilty (maybe 2-3 to exit at the top).
As soon as the dollar rally slows down and stocks start to rally oil will reverse immediately.

And I don't suggest short from here. If you afraid that your profit fades away you can close in some profit.
I'm still holding.
no buyer now
Thank you for your updates and analysis.
Hi Chart. The price of crude oil to be down support to the 41.18$ . Then Long.
41.8$ is (D)
API numbers: Crude build of 3.45 mln barrels
Cushing build 1.46mln barrels
Gasoline +271K barrels
Distillate -1.36mln bbls
So far no big movement in wti price. EIA do out tomorrow. I am looking for a smaller number from the EIA.
Thanks Madryga.
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