Multiple bullish set ups ligning up
There is three patterns that I want to touch on today, which indicate higher oil prices in the coming weeks.
The first and most obvious pattern is the long term trend. You can see starting since last fall oil has been respecting the trendline and continued to bounce on it. Currently the price of oil is resting on the trendline, which should bounce from.
The second pattern, but not as obvious pattern, is the ascending triangle. You can see that the long term trend has been respected on the way up, and has acted as the bottom support of the ascending triangle. This bottom trendline intersects with the horizontal resistance line around $67. This pattern typically indicates a bullish movement, especially as the price creeps up near resistance. Oil creapt up to the price but failed to break a multi year resistance level,.
Lastly, I want to talk about a not so will known pattern that indicates higher prices for OIL. Its the "right-angled descending broadening wedge". This pattern is an inverse ascending triangle, where the price gets rejected off the resistance level, and bounces back off the lower support trendline. This creates a growing triangle pattern, which typically results in the stock moving higher past up the resistance level. Currently we are at the lower end of the broadning triangle.
CONS:
It would be disrespectful to all of you if I didnt focus on the bad side of the current situation. The price of oil has sharped be rejected of the $67 resistance level, which has resulted in bearish momentum. This is no suprise as the $67 resistance level is a multi year resistance level that oil has struggled to break past. As such the selling pressure is quite high here. In the past Trump would tweet about the high gas prices, and send prices lower. This time we don't have Trump to cap the price, but we do have the IRAN deal.
The second negative aspect of this set up is the IRAN deal. There is rumours that the talks are going well, which will result in IRAN getting their sanctions lifted. This will result in an increase supply of oil in the market. This increase supply will definitely send the price down. This is what happened after President Obama signed the Iran deal in 2014, which resulted in the price of Oil going into a major bear market. There is two possible scenarios in this instance. In both cases sanctions will result in higher supplies, but maybe the stock piles wont rise much. The reason I believe this is that Iran has been known of illegally selling oil regardless of their sanctions. In either case, the initial report of a new deal will send oil crashing down.
Summary:
The technical set up is extremely bullish, but the fundamental factors could easily negate the bullish set up.
Let me know what you think is going to happend.
The first and most obvious pattern is the long term trend. You can see starting since last fall oil has been respecting the trendline and continued to bounce on it. Currently the price of oil is resting on the trendline, which should bounce from.
The second pattern, but not as obvious pattern, is the ascending triangle. You can see that the long term trend has been respected on the way up, and has acted as the bottom support of the ascending triangle. This bottom trendline intersects with the horizontal resistance line around $67. This pattern typically indicates a bullish movement, especially as the price creeps up near resistance. Oil creapt up to the price but failed to break a multi year resistance level,.
Lastly, I want to talk about a not so will known pattern that indicates higher prices for OIL. Its the "right-angled descending broadening wedge". This pattern is an inverse ascending triangle, where the price gets rejected off the resistance level, and bounces back off the lower support trendline. This creates a growing triangle pattern, which typically results in the stock moving higher past up the resistance level. Currently we are at the lower end of the broadning triangle.
CONS:
It would be disrespectful to all of you if I didnt focus on the bad side of the current situation. The price of oil has sharped be rejected of the $67 resistance level, which has resulted in bearish momentum. This is no suprise as the $67 resistance level is a multi year resistance level that oil has struggled to break past. As such the selling pressure is quite high here. In the past Trump would tweet about the high gas prices, and send prices lower. This time we don't have Trump to cap the price, but we do have the IRAN deal.
The second negative aspect of this set up is the IRAN deal. There is rumours that the talks are going well, which will result in IRAN getting their sanctions lifted. This will result in an increase supply of oil in the market. This increase supply will definitely send the price down. This is what happened after President Obama signed the Iran deal in 2014, which resulted in the price of Oil going into a major bear market. There is two possible scenarios in this instance. In both cases sanctions will result in higher supplies, but maybe the stock piles wont rise much. The reason I believe this is that Iran has been known of illegally selling oil regardless of their sanctions. In either case, the initial report of a new deal will send oil crashing down.
Summary:
The technical set up is extremely bullish, but the fundamental factors could easily negate the bullish set up.
Let me know what you think is going to happend.
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