Crude Oil: Trend Up?
I wrote this last year:
A possible Reverse H+S. Now we come to the action in Dec. This is the first break above the Neckline and needs a second consecutive month to confirm. If that happens then we have potential for a test up to the area marked by 'X' around 74.00. Now there is a lot of things that can happen before there and we are sill looking for a second close over but resistance currently would be at 56.83, 61.67(dynamic) and 62.58. Support is currently at 52.39(dynamic), 50.92 - 51.93, 48.89, 48.63, 44.32 and 40.01. Should prices have two consecutive close back below the 44.32 level the Reverse HandS is negated...and we think about the market again.
We had the second consecutive close over the Neckline and it looked good for the Bulls.
However, prices stalled from moving higher and instead after a few months started to fall away again, down through the Fibs at 48.63 (38.2%), down through the 50% Fib at 44.32 and even down through 40.01 (61.8%). Yet...and this is a big 'yet'...we never had a monthly close below the key 50% Fib at 44.32 as I'd suggested earlier would be sign for a likely change of direction. We never changed direction...just cleared some weak hands off the market. We've since travelled upwards and are approaching the 2015 high at 62.58. I have had the pleasure of drawing a fresh Bullish ... Pitchfork and I can say that the AP has been perfect at showing the recent angle of attack of the market between the Lower Tine (currently 53.49) and the Middle Time (currently 64.45).
I have to add that this AP has also been very good on a fractal level - being suitable for Daily, Weekly and the Monthly Chart above as well. The next test...well that'll be the 62.58 level but bear in mind the Middle Tine resistance, especially when the rapidly descending 5 Year MA (currently 66.90) is about to intersect...a potentially strong combination. Downside, well the Neckline of the Reverse H+S (currently 53.76) is an obvious support. However, you've got to look to those previously mentioned Fibs, especially the 50% Fib at 44.32 as being key for any test lower. Given all that's happened and with all but one MA pointing upwards, I'm minded to move the bullet point into mildly Bullish...and see if we do reach the Reverse H+S target at around 74.00.
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