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Crude Oil Breaks Lower – Sparking Fears Of Another Sub $30 Price Collapse

Commodities / Crude Oil Sep 11, 2020 - 05:01 PM GMT

By: Chris_Vermeulen

Commodities

RESEARCH HIGHLIGHTS:

  • Breakdown in Crude Oil sparks talk of sub $30 price targets.
  • Initial support likely near $32 to $33.
  • Predictive Modeling suggests deeper price lows may be reached before November 2020.

Have you been paying attention to Crude Oil recently?  Prices have collapsed over -15% from the recent highs near $43.78. You may remember a research article I posted originally in July 2019 suggesting a big breakdown in Crude Oil was going to take place in early 2020 and extreme volatility was likely between February 2020 and April 2020.  Our researchers predicted the following within that research article:


“If our ADL predictive modeling is correct, we will see rotation between $47 and $64 over the next 3+ months before a breakdown in price hits in November 2019.  This will be followed by two fairly narrow price range months (December 2019 and January 2020) where oil prices will tighten near $45 to $50.  After that tightening, we believe an extremely volatile price move will happen in February through April 2020 that could see oil prices trade as low as $22 and as high as $51 over a two to three-month span.”

Then, in early March 2020, we published this follow-up article on our Crude Oil predictions.  Within that article, we updated our analysis to include the following statement:

“If our research is correct, Crude oil may find a bottom somewhere near $17 to $24, the potential rally back up to somewhere above $37~41 ppb before staging another massive selloff.  The massive volatility suggested by the ADL system also suggests a broad price range over the next 60+ days.”

BREAKDOWN IN CRUDE TARGETING SUB $30 LEVELS

Currently, Crude Oil prices have broken into a deep downward collapse after reaching highs near $44 ppb. The extended topping formation above $41 ppb aligns with our earlier research suggesting the broad market peak in Crude Oil over the past three months may have setup another breakdown event as the global markets react to renewed economic fears and the continued COVID-19 event.

Our Adaptive Dynamic Learning (ADL) predictive modeling system is currently suggesting deeper price lows, initially targeting $32 to $33, then possibly falling below $27.50, are likely followed by an extended period of congestion below $30 throughout the end of November.  In reality, Crude price levels could fall below $22 on a broader market selloff, then recover to levels above $24~28 before entering the congestion period we are describing.

We believe ERY may rally 15% to 20%+ as Crude Oil collapses.  The timing and setup, as well as the technical confirmation from our ADL predictive modeling system, suggests ERY could rally at least 11% to 14% over the next few days and weeks.  The extended lower price consolidation that we are expecting may prompt ERY to rally an additional 5% to 8% if a deeper price low in Crude Oil, below $25, is established.

Before you continue, be sure to  opt-in to our free-market trend signalsnow so you don’t miss our next special report!

We don’t believe Crude Oil will attempt to target the COVID-19 lows at this time.  We believe a roughly 61% price collapse from recent highs is likely based on a Fibonacci Retracement of COVID-19 lows to the recent highs.  This places an immediate target price level for Crude Oil below $32.76 ppb.  Our ADL system predicting a target price below $30 ppb suggests a deeper price move is highly likely.  Thus, we believe a move to levels below $30 is highly likely with support being between $25 to $30.  Our Fibonacci Price Modeling system places critical support near $28.30.

Once Crude Oil reaches the bottom and finds support, we’ll be re-evaluating the potential for further price activity and trends. We want to warn you that once Crude Oil establishes the support level below, or near, the $30 ppb level, it will likely enter an extended sideways consolidation phase until after November 11, 2020.  So be prepared for some potentially volatile sideways price activity after the bottom is established.

If you found this informative, then sign up now to get a pre-market video every day before the opening bell that walks you through the charts and my proprietary technical analysis of all of the major assets classes. You will also receive my easy-to-follow ETF swing trades that always include an entry price, a stop, two exit targets, as well as a recommended position sizing. Visit my Active ETF Trading Newsletter to learn more.

While many of you have trading accounts, our most important accounts are long-term buy-and-hold investment accounts. Our signals can help you preserve and even grow your long term capital. If you have any type of long-term investment or retirement account and are looking for signals as to when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals, which includes a weekly market update and trade alerts.

Chris Vermeulen
www.TheTechnicalTraders.com

Chris Vermeulen has been involved in the markets since 1997 and is the founder of Technical Traders Ltd. He is an internationally recognized technical analyst, trader, and is the author of the book: 7 Steps to Win With Logic

Through years of research, trading and helping individual traders around the world. He learned that many traders have great trading ideas, but they lack one thing, they struggle to execute trades in a systematic way for consistent results. Chris helps educate traders with a three-hour video course that can change your trading results for the better.

His mission is to help his clients boost their trading performance while reducing market exposure and portfolio volatility.

He is a regular speaker on HoweStreet.com, and the FinancialSurvivorNetwork radio shows. Chris was also featured on the cover of AmalgaTrader Magazine, and contributes articles to several leading financial hubs like MarketOracle.co.uk

Disclaimer: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. Technical Traders Ltd. and the author of this report has been paid by Cardiff Energy Corp. In addition, the author owns shares of Cardiff Energy Corp. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.

Chris Vermeulen Archive

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