Oil Looks Ready To Collapse
- Posted by TheArmoTrader
- on September 18th, 2012
Oil has had a pretty volatile year so far. Year to Date, WTI Oil ($CL_F) is down 3.3% while compared to last year it is up 11.5%. The range for 2012 has been pretty wild as well; with oil going as high as $110 and as low as $77. After topping out in March, it set a series of bearish lower highs before selling off hard starting in May, and double bottoming in July. Since the double bottom, it has moved all the way back to $100. However, the price action is starting to turn bearish once again.
The chart just screams “bearish” if you ask me. The recent and hard denial at $100 is a tell. The failure at the previous downtrend line is also pretty negative. And it has broken out of the ascending wedge (which isn’t my favorite pattern but it’s worth noticing). A break below the $94 level can get things going. I wouldn’t expect some major support to come in until the high $80s.
This also does not take into account any fundamental news. We have the news of the Saudis releasing more oil, the fact that Gas Prices usually top around these prices, and the fact that we will likely have some type of SPR release (either verbal or physical.) All this should weigh oil down. Oh and don’t forget, oil is going down even with news of QE3.
$CL_F – WTI Oil Daily Chart
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Jerry Khachoyan is currently an undergraduate student at UCLA pursuing a degree in Political Science. He started trading in September of 2008. He concentrates on using technical analysis and reading the tape to enter the best risk/reward trades. The stock market to him is one of the greatest inventions by man.
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