WTI: Favoring A Run Up To 96.20
Matt Simpson | Jan 17, 2014 02:41AM ET
As I continue to build my stance on USD over the coming weeks I turn to another commodity priced in the greenback, WTI.
WTI MONTHLY:
After my call for a 'multi-week low' on Oil in December I was mildly bemused to see it break beneath this suspected swing low. However this is trading for you... So I'll pick myself up and give it another go.
Whilst technically we have been trading sideways since April 2011, the range we trade in is contracting and I see more evidence of rising swing lows than I do of lower swing highs. So whilst this may not appear to be a 'textbook' triangle I still suspect this to be a larger and complex triangle, which will eventually break to the upside. We are trading well above the 200-month eMA and holding above the 50-month eMA, of which both are pointing upwards (very slightly) to highlight increased momentum.
After a failed attempt to break and close above 100 we have now retraced all the way back down to 91.23 and respected the 50-month eMA and rising trendline. However the trendline should be used with a pinch of sale as a Bullish Hammer back in June 0'6 did penetrate this line, although we did close the month well above it. So it depends how strict you would like to be with your trendline - that said it does at least highlight the rising swing lows.
WTI WEEKLY:
The bearish decline from 100 pretty much blew a big hole in my 'multi-week low' analysis as the elongated bearish candle only suggested further downside, which we then witnessed last week. However we have held above the 200-week eMA and appear to be on track for a bullish close this week. If we close around 93-94 we will have a 2nd consecutive hammer above support to suggest near-term gains.
- In the event we do see gains my next target is 96.20 (as this has been a pivotal level of SD/R previously).
- In the event we break below support (less favoured) then next target is 88.90
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