Sunday, August 30, 2015

Oil rallies but price stalls on 4 hour chart

Oil has recovered slightly from its most recent slump. On the 24th of August the commodity hit its low for the year and rallied upwards throughout previous week. You may see three waves up on the chart, which means the security, may be due for a correction or a fall back to previous lows. In any case, the most logical thing to happen now is some consolidation at the level or a topping process and then a move down in waves. 

You may also spot 200 sma and ema on 4 hour chart and price stalling when it hit the indicator. I assume a lot of traders have taken their profits off the table when the price touched the indicators. 

Of course, another rally of 5 bucks is possible. In that case we would see 50 or 51 in US oil. I tend to think we would probably end closer to 50.50, because the level marks previous support of consolidation on the way down. 

Anyway, we need to wait and see how the market performs on Monday and Tuesday to see whether a move up or down is more likely. 

Long term trend: down
Intermediate trend: down
Short term trend: up

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