Oil rally is clearly
stalling. 49 level seems to be solid resistance. You can see on the chart below
how nicely 200 ema stopped the advance of the commodity twice. Another thing
are those bearish pins clearly seen on 8 hour chart. This indicates increasing
bearish pressure and a move downwards can materialize any time now. On the
other hand, if you look at 4 hour chart you can see that price is supported by
200 sma and ema there.
Support comes at 43.20-43.00
(US oil) area where you can spot a bullish pin. So, we can state that price is
trapped between support and resistance and this causes short term range between
49 and 43 levels to continue for some time. Any attempt to come back to 48 is a
sell to me. This week should see a narrowing range in the security which would
lead to a breakout. I tend to think it will be downwards as longer term trend
is still south.
Intra day support is at
46.50, followed by 47.00. I am waiting for a false break up and then a bearish
candle formation to go short. No intentions of buying the commodity at this
point.
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