nmike

OIL..... a "V" shape RECOVERY or a longer DIVERGENCE BOTTOM?

Short
FX:USOIL   CFDs on Crude Oil (WTI)
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51
I've set the RSI at 60/ 40 instead of the standard 70/30, by doing so we have a better view of weak price up-strength. As you can see since early 2012 the RSI failed to move above the 60 level along with low levels of Trix , see example of EUR/USD chart posted in commentaries. RSI failed to move any higher and instead trend line support was broken and downside began. The last 3 (A)(B)(C) bottom reversals began with RSI rising above the 40 level and a shorter Trix bar, there was a fake 40 level break at (A) but that produced a reliable positive divergence reversal signal. Due to the nature of this down move I suspect we will get a “V” shape recovery without divergence just like we had at point (C).
Currently price is just above S1 support, if breaks next likely target is about $40.

Comments

26.50 that would be great!
+3 Reply
I definitely agree with you $40 target. In fact, my options positions are based on the expectation that it will hit 40. call put spread. Fundamentally speaking, no one in the world is willing to cut the production and global growth is slowing down. I don't this oil can hold up. It can only go to $40.
+3 Reply
nmike seine
...great!...thanks for your comment
+1 Reply
You're right about global growth and lower oil prices. Lower Oil is adding to slower growth for many resource rich nations. When will this or will it hit domestic US economy?
+1 Reply
....too early to say as we are just at the beginning of the week, currently we have a bottom channel Clone HIT, if candle pattern ends like this by end of week it could very well be the bottom
+2 Reply
Clone is back!
Reply
side note.....In cases where RSI falls too far below the 40 level the RSI 40 level cross will lag a Trix shorter bar, as you can see at point “A”…. we have a doji candle and a Trix shorter bar but RSI is still below 40, in such cases it’s best to wait for a second Trix shorter bar and a rising RSI. At point “B” we had a 3 alignment pattern: confirmed 3 candle reversal pattern, RSI above 40 & a Trix shorter bar.
+2 Reply
+2 Reply
well, looks like it's going to $40 level
+1 Reply
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