WTI oil - The uptrend in oil continues to peak
Exactly one month ago, we stated that the Russian oil ban would lead to an uptick in oil prices. Since then, the European Union has started to take measures concerning its oil dependence on Russia. Meanwhile, WTI oil has risen from 106 USD up to 114 USD, where it trades currently. Despite being bullish in the short-term and medium-term, we also stated (in our previous posts) that we expected the bull market in oil to peak; in addition to that, we set and maintained our long-term price target for USOIL at 90 USD. That also applies today, and we still keep this target.
Fundamental factors
Our bearish view is based upon several fundamental factors. Among these is the prospect of higher output by the OPEC in the second half of 2022 and the global need for lower oil prices. We expect the U.S. to put pressure on OPEC; there is already a rumor Joe Biden is supposed to ask Saudi Arabia to lower its output. Another fact we consider is that despite the Russian oil ban, new highs were not reached by USOIL.
Illustration 1.01
USOIL appears in the downward sloping channel. The breakout above it will suggest more bulishness in the short term. The channel is
Technical analysis - daily time frame
RSI and Stochastic are bearish. The same applies to MACD; however, it remains in the bullish territory. DM+ and DM- are also bullish. Overall, the daily time frame is bullish; however, certain technical and fundamental developments raise caution.
Illustration 1.02
The picture above shows simple support/resistance levels.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- remain bullish. Overall, the weekly time frame is bullish.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Fundamental factors
Our bearish view is based upon several fundamental factors. Among these is the prospect of higher output by the OPEC in the second half of 2022 and the global need for lower oil prices. We expect the U.S. to put pressure on OPEC; there is already a rumor Joe Biden is supposed to ask Saudi Arabia to lower its output. Another fact we consider is that despite the Russian oil ban, new highs were not reached by USOIL.
Illustration 1.01
Technical analysis - daily time frame
RSI and Stochastic are bearish. The same applies to MACD; however, it remains in the bullish territory. DM+ and DM- are also bullish. Overall, the daily time frame is bullish; however, certain technical and fundamental developments raise caution.
Illustration 1.02
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- remain bullish. Overall, the weekly time frame is bullish.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
