Crude Oil (WTI) Technical Analysis 2011.09.22

This is the move I have expecting!

This is the move I have been expecting on Crude Oil (WTI). There were plenty of signals along that anticipated a highly probable down move.

Both of yesterday’s targets ($85,08 and $83,50) were hit by now and furthermore, the bearish move is stronger than anticipated. The nearest support is set at $80,24 and this area could prove to be a temporary low as the sellers could choose to close their positions and the buyers could bet on a reaction. However we do not have yet enough evidence for estimating a low around the current levels ($80,00-$80,24). The main resistance is set around the $83,20-$83,57 area, where the previous lows are set.

On the larger timeframe (Daily) we can see the broader outlook of the price action of the previous ½ years. The $80,00 area seems a strong support in this chart too but if it is broken, we could expect further bearish move towards the $70,00 area. If this scenario will turn out to be right, the price development is going to take a while (few weeks).

However, this chart will be further analyzed on the 30min time frame in order to find closer support and resistance and to create price action scenario for a timespan of a few days.

    

Crude Oil (WTI) Technical Analysis 2011.09.21

Crude Oil is confirming the bearish move

The brake of the T1 trend line is a strong signal of a further down move and, many times, the price retests the trend line before resuming the main trend.

The rally in yesterday’s session breached the T1 resistance line but the sellers acted quickly by re-establishing the prices below the T1 line. This move proved that the bears are stronger and there is a high probability of seeing lower lows in the next days.

The main down target remains set in the $83.57 area but this should be re-valued on further decline conditions. However, the previous lows from the $85.00 area are creating a strong support that could lead to a temporary reversal.

The Elliiott Wave count for the current decline shows the developing of the fifth wave that should have five sub-waves. Wave (iv) retraced 50% of wave (iii) and created a flag pattern that contained a false break up. 

The first target for wave (v) is set at the $85.00 area but in the same time we should be able too see the 5 wave internal structure in order to define a closer end-zone for this down move. 

Crude Oil (WTI) Technical Analysis 2011.09.20

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.