Most Popular
1. THE INFLATION MONSTER is Forecasting RECESSION - Nadeem_Walayat
2.Why APPLE Could CRASH the Stock Market! - Nadeem_Walayat
3.The Stocks Stealth BEAR Market - Nadeem_Walayat
4.Inflation, Commodities and Interest Rates : Paradigm Shifts in Macrotrends - Rambus_Chartology
5.Stock Market in the Eye of the Storm, Visualising AI Tech Stocks Buying Levels - Nadeem_Walayat
6.AI Tech Stocks Earnings BloodBath Buying Opportunity - Nadeem_Walayat
7.PPT HALTS STOCK MARKET CRASH ahead of Fed May Interest Rate Hike Meeting - Nadeem_Walayat
8.50 Small Cap Growth Stocks Analysis to CAPITALISE on the Stock Market Inflation -Nadeem_Walayat
9.WE HAVE NO CHOICE BUT TO INVEST IN STOCKS AND HOUSING MARKET - Nadeem_Walayat
10.Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - Nadeem_Walayat
Last 7 days
Qualcom Stock Market Harbinger - 12th Aug 22
Apple Exec Gets World's 1st iPhone 14 for Daughters 14th Birthday Surprise Present Unboxing! - 12th Aug 22
Steps to remember while playing live roulette online - 12th Aug 22
China Bank Run Protests - Another Potential Tiananmen Square Massacre? - 11th Aug 22
Silver Coin Premiums – Another Collapse? - 11th Aug 22
Gold-to-Silver Ratio Heading Lower – Setup Like 1989-03 - 11th Aug 22
Severe Stocks Bear Market: Will You Be Among the Prepared 1.5%? - 11th Aug 22
There's a Hole in My Bucket Dear Liza, UK Summer Heatwave Plants Watering Problem Song - 11th Aug 22
Why PEAK INFLATION is a RED HERRING! Prepare for a Decade Long Cost of Living Crisis - 9th Aug 22
FREETRADE Want to LEND My Shares to Short Sellers! - 8th Aug 22
Stock Market Unclosed Gap - 8th Aug 22
The End Game for Silver Shenanigans... - 8th Aug 22er
WARNING Corsair MP600 NVME2 M2 SSD Are Prone to Failure Can Prevent Systems From Booting - 8th Aug 22
Elliott Waves: Your "Rhyme & Reason" to Mainstream Stock Market Opinions - 6th Aug 22
COST OF LIVING CRISIS NIGHTMARE - Expect High INFLATION for whole of this DECADE! - 6th Aug 22
WHY PEAK INFLATION RED HERRING - 5th Aug 22
Recession Is Good for Gold, but a Crisis Would Be Even Better - 5th Aug 22
Stock Market Rallying On Slowly Thinning Air - 5th Aug 22
SILVER’S BAD BREAK - 5th Aug 22
Stock Market Trend Pattren 2022 Forecast Current State - 4th Aug 22
Should We Be Prepared For An Aggressive U.S. Fed In The Future? - 4th Aug 22
Will the S&P 500 Stock Market Index Go the Way of Meme Stocks? - 4th Aug 22
Stock Market Another Upswing Attempt - 4th Aug 22
What is our Real Economic and Financial Prognosis? - 4th Aug 22
The REAL Stocks Bear Market of 2022 - 3rd Aug 22
The ‘Wishful Thinking’ Fed Is Anything But ‘Neutral’ - 3rd Aug 22
Don’t Be Misled by Gold’s Recent Upswing - 3rd Aug 22
Aluminum, Copper, Zinc: The 3 Horsemen of the Upcoming "Econocalypse" - 31st July 22
Gold Stocks’ Rally Autumn 2022 - 31st July 22
US Fed Is Battling Excess Global Capital – Which Is Creating Inflation - 31st July 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Crude Oil dips as it attempts to make a base above $56 before rallying

Commodities / Forecasts & Technical Analysis Nov 15, 2006 - 01:36 AM GMT

By: Nadeem_Walayat

Commodities

Crude oil prices fell as mild weather countered OPEC's announcement that it will cut production. Crude Oil continues to build a base between 58 and 62, above the support zone of $56, in prelude to an uptrend after the sell off into October that took crude oil to technically very over sold state.

Crude Oil dips as it attempts to make a base above $56 before rallying


Technical Analysis
1. Price Patterns & Support - The decline was strong off the 80 high, which suggests that the next up trend is likely to be weak. The key support is $56, which crude continues to hold. Key chart resistance area is between 72 and 68.
2. MACD - (Bottom indicator) - Has reached a very oversold state, which suggests that regardless of the fundamentals, crude oil is due at the very least a corrective rally. Of key interest is the lower high made in July and the Lower Low made in November, which suggests that the expected rally will not be particularly strong, and likely to encounter significant resistance at $70.
3. Moving Averages - In a further sign of weakness, crude oil continues to trade below its 50wk moving average, and the long-er term 200 wk moving average rising towards 50. This suggests a corrective rally to the 50 week, and a following trend lower towards the 200day is likely.
5. Time - The decline in crude time wise is one of the largest during the bull market and suggests that a retest of the high is not likely in the near future, rather a corrective rally into Dec / Jan, as crude oil marks time before it retests the lows.

Conclusion - Crude Oil, is attempting to make a base above $56 for a rally towards $70. This has so far taken a month to form, with increasing signs that the bottom formation is virtually complete, and suggests a move higher in the coming weeks. Though this is at this point being seen as a corrective rally, and likely to be followed by another move lower to $56.

Buy Trigger - A break of $63.50
Target - $70 resistance area.
Stop-Loss - 50% of the high low range $64 to $57 or lower = $60.50.

Related Articles
Oct 18, 2006
Crude Oil is attempting to make a base above $56
Oct 11, 2006
Crude Oil dips below $59, When will the uptrend resume ?
Sept 18, 2006
What's behind the Meltdown in the Commodity markets?
August 28, 2006
Is the 'Commodity Super Cycle' Fizzling Out?
July 23, 2006
Mid-East 'Oil Shock' Rattles Global Stock Markets, Energizes Gold
August 07, 2005
Peak Oil and can Saudi Arabia come to the rescue ?
April 12, 2005
Crude Oil Bull Market Running out of steam ?

 

Nadeem Walayat

(c) MarketOracle.co.uk 2005-2006

Disclaimer - This Forecast / Trade Scenerio is provided for general information purposes only and not a solicitation or recommendation to enter into any market position, and you are reminded to seek independent professional advice before entering into any investments or trading positions.
The Market Oracle is a FREE Financial Markets Forecasting & Analysis online publication. We aim to cut through the noise cluttering traditional sources of market analysis and get to the key points of where the markets are at and where they are expected to move to next
! http://www.marketoracle.co.uk

This article maybe reproduced if reprinted in its entirety with links to http://www.marketoracle.co.uk


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments


15 Nov 06, 16:10
Re: Crude Oil dips as it attempts to make a base above $56 before rallying
Looking at your above chart, they show a rally in all 3 preceding years in decemebr through Jan, so you may be right ;)

How come you did not pick that up :D


Post Comment

Only logged in users are allowed to post comments. Register/ Log in