Crude Oil at Important Support
from ChartWorks:: published by Institutional Advisors
The decline in crude oil since July ($79.86 to $59.80) is into the projected support area of the 50-week Keltner band at around $59. It also compares well with other corrections of the past two decades.
The weekly RSI(14) is now down to 35. Optimum lows have generated RSI reading in the mid 30’s on the test of the Keltner band. The initial declines from the highs once the 50-week moving average was violated were as follows:
Interim Bottom at Keltner Band
The decline is now 10 weeks old. Since 1990 the initial declines to the Keltner band have been of similar duration (9, 13, 9, 10, 9, 12, 14 & 11 weeks).
Typically, the corrective rally retraces 40% to 60% of the decline. It can take upwards of seven to twenty-six weeks to make the complete rally. During the interim period it is common to make a retest of the support (i.e. a double bottom), generally taking it out by 3%. Such a re-test would be within the normal parameters of a seasonal low, anticipated to occur during December-January.
The opinions in this report are solely those of the author. The information herein was obtained from various sources; however we do not guarantee its accuracy or completeness. This research report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance.
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June 2nd, 2020
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