Crude Oil broke a trend line!
We are in a clear down trend on Crude Oil since September 13 and yesterday’s price evolution confirmed it by the break below T1 trend line.
The fail to retest the $88,00 resistance yesterday eventually proved the bears’ strength and provided further decline outlook for this week. The consolidation below the T1 trend line is typical for a trend continuation and we are looking for a flag or a pennant pattern that could test the $86,50 – $87,00 resistance area. Basically, we expect bear intervention around the resistance levels.
An eventual trend reversal in the above mentioned area will set the down target to the $83,60 area (this target being mentioned in the previous analysis).
On the 15 minute chart (attached below) we can take a closer look to the current price action. The correction pattern is a flag that has its upper border in the $86,90 area. There is a strong resistance in the $86,50 - $87,00 area, given by yesterday's temporary lows ($86,55) and the T1 trend line.
An eventual reversal in this area will provide further bearish outlook. The classical selling signal of the flag pattern is the braking of its lower border but the above mentioned scenario (failure at resistance zone) will give the first trend resuming signal.
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