Crude Oil – Looking for an extended correction
(WTI) US Oil
Monthly: Trading close to the bottom of a bullish channel formation. Trend line support is located at 64.00 with previous swing low at 63.57. Bearish dark cloud candle posted. Reverse head & shoulders formation looks to have completed. Selling pressure from 75.24 has resulted in prices targeting a new 4-month low.
Weekly: Trading close to the end of an ending wedge formation. Price action formed evening doji star formation, often an indication that the bullish trend is over or we should see at least a sustained correction to the downside. 7 out of the last 8 weeks have seen negative price action. Plenty of room for a correction without impacting on the long-term bullish bias.
Daily: Price action has formed a bearish flag with prices now extending lower and the measured move target is 62.00. The 161.8% Fibonacci extension is located at 61.95. Further downside is expected, although we prefer to set shorts on a rally for better risk/reward conditions.
Action:
We look to Sell at 67.00
Stop: 68.50
Targets: 63.60 and 62.00
