Crude oil market fell significantly during the course of the session on Monday, slicing through the $32 level. Because of this, market look as is ready to go lower. Below the level $ 30, we feel that the market will more than likely trying to reach towards the $28 level. Technically market is looking weak on chart and prices is trading below the resistance trend line on its daily chart. In 4 hourly chart, prices are sustaining below its support trend line indicating downtrend movement in oil prices. It is having an important resistance at the level of $32.30 and support at the level of 30.50. If it breaks its support level on downside and sustains below it then we can expect it to show further bearish movement in Crude oil prices.
INDICATORS:- MACD is sustaining in its negative territory indicating the bearish trend in the prices. RSI is sustaining in its selling zone indicating the upcoming bearish trend in the prices
STRATEGY:- Crude oil is looking bearish on charts for next few trading session. One can go for sell on higher level strategy for intra day to mid term positions in it.
Yes crude started its 5th wave decline on the 3 rd wave(daily chart) wave 1 in progress(likely to end arnd 27--28$ then wave 2 to 31---32 ,,,wave 3 to 18$ wave ,,,wave 5 will take crude to 10$ a barrel,, that also 1.618% fib of wave 1(on a daily time frame) . i believe crude will hit below 5 $ sometimes this year on its 5th wave (may sound silly but thats what chart tells .if u look at corrective waves they are impulsive in nature meaning there were retail traders tried to take up crude and failed in every attempt.that also warns us long term bets are short )plus Iran is pumping extra 500 million barrels per day when demand is declining and likely to increase to 2 million barrels per day (crude will rise to 45---47$ a barrel on 4th wave but 3 rd wave will shock a lot of people before that happens. real reason crude is declining are many(this is my believe
1)declining demand(slowing down emerging market)
2)US shale production (sufficient for USA s self consumption)
3)Iran back in market with ample supply
4)risen Dollar index
5) we are heading to the end of crude era as SOlar energy taking over (when some said wifi would kill the telephone industry(long distance was a huge market back in 90 s) people laugh at it look at whats up viber,,skype all made it possible (solar energy is growing at 200% a year some predict in 12---15 years we will be able to light the entire world for 36000 years
disclaimer
my comments here are for educational purpose only i dont suggest you buy or sell based on my suggestion .Trading is risky and you could loose a lot of money
piponomics
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Very interseting points Thulasi, I agree that we need to look back further and see that in only 2001, when John Brown at BP bought Amoco, oil was around $10/11 a barrel, and now we are complaining about a $20 price. Opec enjoy the monopoly, however, they are only ever able to set the bottom of the price, not the ceiling.
AS you rightly said, look at the impact on the emerging markets, Iranians coming into the oil supply-side, Saudi's are unwilling to cut off production...
thulasi
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Yes agree .Good luck
piponomics
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Same to you, are you currently in?
thulasi
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Thanks .No I dont trade crude but i trade usdcad which is co related to crude.there fore i tend watch crude as much as usdcad(when usdcad is unclear and confusing my remedy is crude and audjpy they tell me the direction(except on interest rate times and unemployment)
1)declining demand(slowing down emerging market)
2)US shale production (sufficient for USA s self consumption)
3)Iran back in market with ample supply
4)risen Dollar index
5) we are heading to the end of crude era as SOlar energy taking over (when some said wifi would kill the telephone industry(long distance was a huge market back in 90 s) people laugh at it look at whats up viber,,skype all made it possible (solar energy is growing at 200% a year some predict in 12---15 years we will be able to light the entire world for 36000 years
disclaimer
my comments here are for educational purpose only i dont suggest you buy or sell based on my suggestion .Trading is risky and you could loose a lot of money