U.S. Oil: Bottom Calls Look Premature
Dailyfx | Jan 22, 2015 01:07PM ET
- Bottom pickers look early
- We’ve seen this price action before, several times
- A bottom might not be far off, but recent activity suggest lower before higher
Lately, there has been no shortage of chatter surrounding crude oil and with that, also a lot of calls for a bottom. While I agree it appears to be late in the move to initiate new short positions (-57% decline since July), I don’t believe we have the type of price action supportive of a bottom yet. The price action the past couple of weeks has been uninspiring, with nothing more than a move sideways. This lateral movement, a flag pattern if you will, during strong trends more often than not acts merely as a pause before another push takes place in the direction of the prevailing trend. I’ll be sitting tight waiting for more convincing price action before taking action from the long side.
---Written by Paul Robinson, DailyFX Research
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