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Sunday, January 3, 2016

The Financial Doctors Technical Analysis: CrudeOil

CrudeOil: Make Or Break 
"This Month Decides The Fortune”

Should auld markets be forgot and never brought to mind? Should auld markets be forgot and auld lang sine?

Not on you life! Oil put in its second back-to-back losing years since the eighties but perhaps its time to remember what happened the year after that first loser! The last time oil put back to back losing years in in 1997 and 1998, the following year of 1999 gave a historic comeback and cemented a bottom in oil prices for a generation. After falling over 30% in 1997 and 1998, in 1999 the oil market rebounded almost 107%! And this year, crude oil is getting ready to party like its 1999.

CrudeOil (Weekly)

Technically on a long term basis, Look for a Break around $40.13 , Targeting $62.05 - $87.48. But for now, Trend seems to be week in a Shorter Scenario.

Technical View

There are various Elliot Wave Counts suggesting the fortune for CrudeOil in the coming month. Lets focus on them individually.

Weekly Elliot Wave Count Chart for US CrudeOil-

(Click to Enlarge)

Monthly Elliot Wave Count Chart for US CrudeOil-

(Click to Enlarge)

Both the charts are showing the start of Wave-4 Upside very soon, which will be the quickest of all and aggressive in nature (a breakout).

Interestingly, in the Daily Chart, CrudeOil is in the completion stage of Wave-5 Downwards and also hanging just above a Make or Break Area of Rs.2260 - Rs.2160 ($31.60 - $30.40)

Daily Make or Break Chart for MCX CrudeOil-

(Click to Enlarge)

If CrudeOil Breaks and Sustains below this area of Rs.2260 - Rs.2160 ($31.60 - $30.40), Wave-5 will extend further upto Rs.1950-1800 (28 - 26).

Trading Prospective

Lets have a look at some Entry and Exit opportunities for traders in the CrudeOil.

Daily Trendline Chart with Potential Entry Point for US CrudeOil-

(Click to Enlarge)

The structure looks like an Ending Diagonal and MACD is showing divergence so we'll have to see if the Lower Trendline (Blue) along with “Make or Break Area” initiates a bounce prior to completion of the AB=CD or Not. If it breaks and sustains below $32, a monthly target of $20 will be triggered, possibly achievable in Final Wave-5 of Monthly Chart.
For aggressive buying, a crucial entry point is between $32 - $34 with strict Stop Loss.

If it breaks the Lower Trendline (Blue) to the downside at "127.20% x 2AB" , the best buying is where a possible AB=CD pattern completes. This should be roughly in the $25 - $26 region. This psychological level might provide support in any case.

Though the initial target should be at $37.50 (50% CD Retracement).

For Detailed Technical Support, 
Ask The Financial Doctor .

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