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FiringSquad13

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Guest GaryB

4 hour analysis. US OIL.

 

With the  breakdown in US Oil below the $52.80 support, the price can be seen pushing outside the Bollinger band on two occasions.I have highlighted the WEEKLY support level of $48.60 ( established at the midpoint support of the primary move up on the 28th November) this chart now highlights the traders adage of dont catch a falling knife.
The upper bollinger band has now turned back towards the price action suggesting the volatility is falling.

With this type of price action underway look for a base to be set with an outside period or bullish hammer and pivot bar.
Then an entry signal with effective stops can be taken following the break of recent highs.

Avoid the risk of second guessing a low is in, as this contract can trade lower in current uncertainty around OPEC cuts.

The original analysis can be seen on IG TV here ->      https://www.ig.com/au/market-insight-videos?bctid=5354360569001&bclid=3671160850001 

 

 

Oil - US Crude 4hour (-).png

 

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Guest GaryB

Oil just got interesting, with the Fakeout low followed by the inside period.

bolliinger bands contracting with the price back over the $48.60 key level.

Agressive price action traders have taken an entry on the move over the high of the inside period.
The long range bar set at the close looks to be a short cover,

Resistance at the middle avaergae of the bollinger would be montiored, still looking for a break of $50.50

 

Oil - US Crude 4 hour (-).png

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  • 3 weeks later...
Guest GaryB

The play out of OIL in the 4 hour is complete with the 3 spike lows completing the basing pattern.
While it can never be known when a price will reverse, the trading technique is looking for a set up that can be proven.

The key to this pattern has been the move above the lower high $48.40. The first break over a high  with 3 spike lows in the background.  *This pattern showed up in daily Copper last week.

 

Oil - US Crude 4 hour (-).png

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  • 4 weeks later...
Guest GaryB

Staying with the 4 hour chart of US Crude:  from the base set during March and the following rally into the $54 levels, clear reversal took place with the rejection period and lower high. The following price action gave plenty of indication of price weakness as the 20 period centre Bollinger band average provided resistance until the capitulation move back to $50.50. The following price action simply walked down the lower Bollinger band.
All hindsight analysis.

So here we are at the right hand edge with a potential buy set up unfolding with a very specific stop loss.
On the 20th and 21st of April the Relative strength indicator almost gave a swing buy signal, where the price makes a new closing low but the RSI swings higher over a previous high.

The same signal is highlighted again and is now complete.
Point (1) shows the price making a low with the RSI below the "30" level, nothing unusual in that, the following price rally too point (2) saw the RSI swing back over the "30" level. Ay point (3) the price makes a new closing low at $49.10 but the RSI fails to make a new low ©. The following bullish price range, not only an outside bar but a high close in that bar is the first alert signal.

The RSI has swung back over the (b) high point giving a swing buy signal, the 2nd signal.
In the overnight session an outside high close bar is the final signal and gives a valid STOP LOSS level at the low of $49.00 on a long position.
With the general observation of the RSI swinging over the (50) level along with a higher high, only suggests price momentum to the upside.

 

 

 

Oil - US Crude 4 hour (-).png
 

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Why is the price that I see for US crude oil and Brent crude oil on IG index different from what I see on Bloomberg by about 100 basis points?

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Guest GaryB

IG quote a continuous price as a $ cash contract, so there is no "rollover"

 

Or you can also trade the specific month contract with an expiry date.  

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  • 1 month later...

Having a big down day today, may well be looking to retest the long term trend line if it can break through the $50 long term support/resistance level. Oil has been particularly difficult to trade for some time now, OPEC keep trying to find mechanisms to push price up (production cuts, press releases etc) but always run into the spectre of US shale which becomes profitable around $50. As price goes higher US shale production increases and brings price down again.

Not surprising price continues to coil ever tighter about the $50 mark but oil will always be susceptible to geo/political news breaks.

 

brent.PNG

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