OIL - New hope

FX:USOIL   Crude Oil (WTI)
6848 52 90
We went for long at the exact bottom on Friday. I will be still frightened though.
There is only a 40-45% chance that it was the bottom at this correction.

Signs of the bottom:
Bouncing from the 200 Simple Moving Average (200MA)
RSI is turning up sharply - in the past it was the sign of the reversal
SlowStoch is crossing over and turning up
The panic selling's volume is good for the bottom: decreasing as sellers are drying up (Check the January 2016 panic selling volume )
Based on this I say we are ready to run.

Signs against the bottom :
Volume is too small on Friday
MACD is not turning up and far from the crossover
Target price counted from the triangle is far away (38$)
Price still might want to enter between the 200 SMA and the 50 FIBO

SO the next 2-3 days are very important. How strong the bounce will be(no doubt there will be a bounce) . If we are printing too big candles it's not good. If we are printing very small candles that' also not healthy for calling the bottom.
And the volume . We need a big volume on Monday or Tuesday. Otherwise the decline continues for a few more days.

Timewise we can fall till the 12th August....

I set this idea as a long, one can still try a long position early tomorrow but no more than 5% of the capital. If we are starting to run oil             will be between 60-70 by the end of this year . So you don't have to worry about missing the first 2-3 $.

As I'm here at the UAE I don't see any signs of the oil             recession. Constructions are running, places are full etc.
Again: the sub 30$ oil             is a history. Sooner or later everyone will realize. Who realizes early will make big money the rest will be shorting this all the way up. But that's the market.

Saudi BT             Bottom will not be taken out. I think that's a too important level. I think all the powers consulted before that how far they will let oil             price to fall That was the level where all of them standig with their buys at that night.

PS.: Constructive notes are very welcome below this post. Contrarian notes also.
But if you are contrarian pls             at least post a chart to support your view : and all we can see how detailed your analysis is.

Comment: DAY 8 of panic selling
The swing yesterday was erased completely and we broke below the 200 MA.
Everybody is getting super bearish. The fundamentals are calling the end of the world.
I'M getting ready to buy again.
Next important level is at the FIBO 50 (38.84)
Comment: It's an interesting day. They might have run the stops below the 200 MA and starting the rally???
Yesterday's high is very important. If we break above we are ready to run
Nice analysis and notes to explain the position and behavior. Much appreciated.
reversal shown at chart n absolutely u r right
Thank you I agree with you ..It seems to me that it will go quick below 40 $ and a quick return to the top ....Part will depend on the EUR / USD pair
We can see the price bounce up to about $43 in the very short term, then fall more towards $38 in the next two weeks or so, and print positive divergence in rsi
faris.makki faris.makki
Don't forget that this is a bear market now, so price won't be very sensitive to oversold levels as compared to overbought levels. you can tell because the RSI for the past two months have been ranging from about (28 to 57)
+1 Reply
Vikas faris.makki
thank you faris..i lose lot of money..on dnr
I use momentum to do my trading . I think it is very important
Momentum quite often is misunderstood , it is the rate of change in price , how fast the price changes in time i.e. ABC closed three days ago @ 10.35 , yesterday's close @ 10.50 today's close @ 10.62 even though the price is rising momentum is fading
Momentum is negative , Price action still negative , wave No 3 is associated with strongest momentum , the chart shows a No 3 wave developing so a No 5 is underway first we need a No 4 corrective
Fundamentals also support the thesis of a down move , demand is not there yet , futures are mainly driven by Hedgers , Producers are sellers and consumers are buyers , Oil producers sell specially when they see ahead a contraction in demand and consumers ( i.e. Airlines) buy when they see demand picking up This summer , which is almost over , the expected demand in Gas was not there , refiners soon will enter maintenance in fall and that will diminish demand for Oil
Here is the Chart hope is of some use
very good analysis as usual. the gasoline inventories are at record high particularly this period of the year where demand for gasoline is usually high. this is definitely not a good sign to go long on OIL. right next to this summer the refineries will go for maintenance, where crude demand is historically low. probably this is already factored to the drop from 51 to 41, I don't know. while I am a long term bull on the oil, I am not convinced that we will not see another bottom. right now I think we will see 36-38 before it reverses. I am not a chartist, so I don't have chart to support. sorry. but as you said if the volumes of early next week are high enough, will be convinced to go long.
not bad, but I think it is very likely to be a turnaround. some other markets that very strongly correlate wit the oil showed ending diagonal and the leading diagonal after. if not a turnaround - then there will be a significant move up before a move down
Hi, sorry I may sound silly. R u using oil futures? I tried to replicate your 200 days simple moving average on futures charts, on, but I can't get close to your support at 40.50 level. ( I m using sma on daily continuation data, as well as sept contract). 10s in advance for your reply.
chartwatchers PRO sherlockjeff
I'M tradin at SAXO the US Crude Sept and October.
But for charting use this chart (USOIL) here in trading view. You cannot chart the futures chart.
ANd I dont daytrade in oil. I'm catching minimum the 4-5 days move.
Futures prices need time to move.
sherlockjeff chartwatchers
Hi, nt sure where this trading view pull the data from. There is only futures & etf 4 oil. (USO). As such, i don't think the anslysis will b correspondingly complete. But on Saxo, do u trade against the house? Or is it cfd?
Fullmoon chartwatchers
Which financial product do you trade for long term in oil? Is that future contract or CFD? Thanks for the kind answer
I'm also having trouble replicating the chart and moving averages with CL on Ninja Trader. The analysis and market predictions are spot on, but I cannot match the technicals.
chartwatchers PRO dannyinhouston
I'v tried many trading platform's cahrting but tradinview is the best till now.
Trade on your platform and use it here for the analysis.
EVen at SAXO and Interactie brokers I've seen many false signals. Candles are not the same etc.
sherlockjeff chartwatchers
Hi, sorry 2 add last comment on your post. I think u did a good job on the analysis but if data is not complete, all your analysis may point 2 wrong direction. U can probably switch 2 other charting sys, a lot of them free online. Then use it 2 trade your product. Just my 2 cent comment.
Thanks Arpi for the update. Was looking at USDOLLAR charts, seems like there is a chance USD may bounce up. Hence pushing Oil down abit today.
oilyprata oilyprata
What do you think? Thanks for your advice :)
We did exact the opposite.
Bad news for you.
We are in nearly 20% profit now.
It bottomed.
Drop today :/.
But we are close, I'll open position tommorow.
Does this pull back provides an opportunity to switch to ERX? I don't like small energy stocks as they have quite a chance to go to zero. ERX would be much safer with comparable rewards.
I checked XLE. Still very risky. I would say if we break decisively $65.69 down, just get out.
Wrong again! We will get to $35 i think.
toothless gordan21
What exactly was wrong? You may want to read the post again
+3 Reply
oilyprata gordan21
yes gordan, please read his post ;) especially the 2nd line ... and this is long oil also :)
No. I was right again.
We are nearly 20% profit now.
Wow strange. So much drop...
And stocks raging. Lol
the volumes you use on USOIL are very different from what's seen on CL1!. have you tried using the actual futures for volume?
USOIL is the biggest chance to buy for long and long run
+1 Reply
Is anyone following oil sentiment? Is it still bullish?
Do you think we could see one more high volume dump to $38 or even $35 if inventory report is bearish again this week? opened a long yesterday and set stop just below 200day and got stopped out; had been short up until last week, Long from the $35-$38 range looks very nice.
Volume is looking too poor to suggest the drop is done yet. Oil Sentiment traders are thinking the world is nigh but the volume for now does not support that. I think we are looking at a drop from here of another $1-2 to late $30's, maybe 37-38, then we are done.
DXY is looking like it is weakening a lot. Bear flag perhaps (on DXY) then further drop, US dollar decline will support OIL rise before dropping rig count (natural lag).
Massive glut in Oil but its priced in, Russia, Saudi, the big boys are playing a political game now and for now its OK.
OPEC is a failed entity and they will not play Russian Roulette for ever. They need to cut production as the two big boys try and get to grips with the reality that they still need to pay their bills.
Canada, screwed, Iran, new kids on the block, all African countires screwed, Libya, screwed, Venezuela screwed, Angola screwed, Nigeria screwed, , Saudi, screwed, this is all about new efficiency in US shale production. The big problem is if you look at oil producers like Canada all the calculations are based off existing infrastructure and prior investment..... over the next years, the investment return is different. US Shale producers are going to annihilate the rules of what is financially viable moving forward, the rules have changed.
+2 Reply
Oil dropping along with DXY that aren't strong.
Crude is getting killed... Dollars also. Finally, but how deep will we go? 38$ I assume is max.
Everything that I've been telling you has been prophetic Nice Es selloff after CL broke $40. Nice bounce in gold. $32 this October. I don't know if this will push us in a recession in H1 2017. This would coincide with other macroindicators. I don't know how close China is from filling their SPR and I don't know how cold of a winter we are going to have. These are the things that will affect how low we go. Don't rule out a retest of $26 my friend.
I will be buying heavily at the 50 FIBO tomorrow. Don't bet the farm on an oil related recession before american elections.
SPX cant print a simple pullback....

+1 Reply
verlin03 chartwatchers
We will likely get a bounce tomorrow because of imports. They were anomalously high last week @ 8.4 versus 8.1 4 week mean. I'm hoping I can get a bounce up to $43/$44.50 on a compusory draw (which I will buy on news). To me, CL is forming a distorted crown pattern. Good luck but trade small against the trend.
adelb verlin03
imho the problem with the long trade now are the clouds over our head. I've supposed to bounce from 52 with a daily cycle short, but didn't thougt with so many test of area 50.
if it doesn't take this support area at least with the weekly chart, well, 36 is in the air, and then also lower area are possible.why not? we will be again in the down trend.
adelb adelb

verlin03 chartwatchers
Another point... If these 8.4 mmbpd are structural.... we will slice $38 in the same fashion as $40
Would say GUSH is a good one for this trade?
4 CLU6 is best.
volume is not supporting a bottom. And other mixed signals. I'm waiting for a better entry (like we did this Feb) and would not regret if ending up with no position.
Ok, we now have bottom, today that was. Will buy tommorow or friday.
Hi Arpi. Any opinions on buying ERX?
what do we think; bottom in? RSI broke above a declining trend line I have on 4h; but not on daily. MACD turning up but still below 0 on 4h, has not turned up on daily yet, almost. Still would love to see ~$38 making perfect reverse H&S set up...
Made an order at 40,45, hope we retest it tommorow to make it happen.
Arpi - good point now to add long ? I haven't got any, because I was late to set up an account.
Or wecan have another ICL in the next week?
Hi APRi , I have bought at 39 and 40 on your proposal. Small lots, ie 5 each, should I continue to hold and or maybe buy again... This is now 6 days since your last comment..I have brought up SL to profit. Just wondering, wether your derection is still bullish for oil.? Thanx for all your great work...Ron NZ
I hope you still have it.
Don't touch!
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