Hello everyone, as we all know the market action discounts everything :)
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Oil hit a five-year high near $84 a barrel on Thursday driven by tight supply and a global energy crunch, although prices eased as some investors took profits on signs the rally is looking overstretched.
The market and different technical indicators currently are giving a lot of signs that this Bullish push is overextended which could lead to a correction move in the near future.
Possible Scenarios for the market :
Scenario 1 :
a correction wave is due and it will probably start by a drop in price that will lead the Crude price back to the first support zone located near the $80 area where the Bulls power will be tested, If the bears were able to beat the Bulls at that level then we could be seeing a further drop that will reach the $75 - $76 level.
Scenario 2 :
the global energy shortage has caused a push in oil prices recently and a solution for that problem hasn't been found yet. So after the correction wave happen the Bulls will go in to try to push the price back up and when that happens, the market will be moving to the first resistance line located at $84.98, and in case a breakout happens from that line then a further push will happen to reach the $87.93 level
Technical indicators show :
1) The market is above the 5 10 20 50 100 and 200 MA and EMA (Strong Bullish sign)
2) The RSI is at 71.38 reached the overbought zone, which indicated a correction is due, with no divergences found between the market and the indicator.
3) The STOCH is moving in the overbought zone which could indicate a drop soon, With a negative crossover between %K and %D.
Daily Support & Resistance points :
support Resistance
1) 82.30 1) 85.27
2) 80.36 2) 86.30
3) 79.33 3) 88.24
Fundamental point of view :
Oil prices have eased in Asia after China’s threat to cap coal prices saw the mainland coal futures slump limit down once again today.
That has unwound some of oil’s gains overnight after Saudi Arabia poured cold water on more OPEC+ production, oil or gas, and US official Crude Inventories, Gasoline and Distillates fell sharply, including crude stocks at the Cushing hub.
WTI jumped 1.33% to USD 83.50 overnight, testing USD 84.00 a barrel intraday. In Asia though, it has fallen 0.50% to USD 83.10 a barrel.
This is my personal opinion done with technical analysis of the market price and research online from Fundamental Analysts and News for The Fundamental point of view, not financial advice.
If you have any questions please ask and have a great day !!
Thank you for reading.
_________________________________Make sure to Like and Follow if you like the idea_________________________________
Oil hit a five-year high near $84 a barrel on Thursday driven by tight supply and a global energy crunch, although prices eased as some investors took profits on signs the rally is looking overstretched.
The market and different technical indicators currently are giving a lot of signs that this Bullish push is overextended which could lead to a correction move in the near future.
Possible Scenarios for the market :
Scenario 1 :
a correction wave is due and it will probably start by a drop in price that will lead the Crude price back to the first support zone located near the $80 area where the Bulls power will be tested, If the bears were able to beat the Bulls at that level then we could be seeing a further drop that will reach the $75 - $76 level.
Scenario 2 :
the global energy shortage has caused a push in oil prices recently and a solution for that problem hasn't been found yet. So after the correction wave happen the Bulls will go in to try to push the price back up and when that happens, the market will be moving to the first resistance line located at $84.98, and in case a breakout happens from that line then a further push will happen to reach the $87.93 level
Technical indicators show :
1) The market is above the 5 10 20 50 100 and 200 MA and EMA (Strong Bullish sign)
2) The RSI is at 71.38 reached the overbought zone, which indicated a correction is due, with no divergences found between the market and the indicator.
3) The STOCH is moving in the overbought zone which could indicate a drop soon, With a negative crossover between %K and %D.
Daily Support & Resistance points :
support Resistance
1) 82.30 1) 85.27
2) 80.36 2) 86.30
3) 79.33 3) 88.24
Fundamental point of view :
Oil prices have eased in Asia after China’s threat to cap coal prices saw the mainland coal futures slump limit down once again today.
That has unwound some of oil’s gains overnight after Saudi Arabia poured cold water on more OPEC+ production, oil or gas, and US official Crude Inventories, Gasoline and Distillates fell sharply, including crude stocks at the Cushing hub.
WTI jumped 1.33% to USD 83.50 overnight, testing USD 84.00 a barrel intraday. In Asia though, it has fallen 0.50% to USD 83.10 a barrel.
This is my personal opinion done with technical analysis of the market price and research online from Fundamental Analysts and News for The Fundamental point of view, not financial advice.
If you have any questions please ask and have a great day !!
Thank you for reading.