Today I want to look at the charts again and this time I would like to look at Crude Oil.
As always my preferred time horizon is weekly. This is what a chart of WTI Crude looks like:
Figure 1. Weekly chart of the Light Sweet Crude Index representing the price of WTI crude oil. The chart spans a period from the end of 2014 until present. The 50-week moving average is represented in blue and the 100-week in white while straight trend lines also are in white. Chart: FreeStockCharts.com
What is clear from the chart is that prices were declining since the end of 2014, but that they changed direction and began to trend upwards at the beginning of 2016.
What we have is really two opposite trends – one descending and the other ascending – and they will soon collide.
When the pattern looks like this there is a lot of tension that is building up in the chart and when this tension is finally released the moves that follow usually are violent.
As it looks now prices have tried to break through the resistance that exist around $55, but to no avail.
My odds therefore favor that the penetration through the resistance will fail and that we will soon see a lot cheaper crude oil.
The post Technical analysis of crude oil – Friday, March 3, 2017 appeared first on LJ Nissen's blog.
