Yesterday we broke above the previous(?) daily cycle - the DCL is still not confirmed - and today early morning GMT we break below it but it was bought in a few hours.
Oil starting to show strength. If it's a new daily cycle the bulls should buy every dip. And they are doing their job.
The next mission is to break above the blue . That is the previous daily cycle's . If we break that - and it seems as I'm writing this it will - our long position has a "DCL injurance".
What does it mean? It means that this is the breakout you can buy . It will has a very high chance that we are going to rally above 48-49 and later above 52.
So all those who missed the lower entry point this is the place I would enter with longs.
If we break above the blue I will switch to lower timeframe with my posts to see the details of the story. If I'm right this is the 2nd daily cycle of this intermediate cycle. This one usually produces the best rally.
Who was short it is the time to get out and change the direction. All the losses you made on your short trades you will earn back in the next 4-5 weeks.
And is looking god now. Crossover below 0....
Let the rally begin!
Timewise a drop to the 200 SMA is still on the table in the next 2 weeks.
For example, recently I witnessed what looked like H&S pattern almost finished forming for Yahoo but then completely destroyed over the last two days. Though I'm still bearish on that stock.
At the same time, Oil's H&S is much better shaped and over much longer period of time
as opposed to a descending triangle:
But as you can see from my chart, at this point it is hard to say. There is still a case for both at the moment (i.e. the bottom could still end up being either flat or declining). Only the nature of the bounce will tell.
Since Arpi is great in cycles, he seems feels much more comfortable and confident in these circumstances then me, as I'm only applying the technicals. But he is an awesome instructor and I believe I'm a decent student, so it makes learning just a matter of time...
Besides, this spike still needs to prove the rally has started. If it rallies indeed - great! But something tells me (strictly my view, I always call for people to rely exclusively on their own analysis) that the triangle pattern will finalize itself before (and if; "if" is always present) the actual run begins.
I also have open buy orders at the bottom of that pattern. Just in case...