We have discussed Brent Crude on the 10th of January.
Crude Oil - Big Move
Thankfully this was not as horribly disappointing as the call on the Nifty :)
125$ has not been touched yet. But the basic directional call has been proven reasonably fine. So I thought, maybe its not a bad time to see if the call can be taken further.
Source : Bloomberg
So ATC moves on and has managed to visualise a standard "flag" pattern. That can be seen in the white coloured parallel lines on the chart. "Flag" patterns are supposed to be consolidation moves for a previous move and the slope of the "Flag" is generally opposite to that of the previous move.
In this case that move happens to be the one from roughly 80$ to 125$ for Brent. Then we have now had a one year weekly "Flag" pattern. Brent has now broken out of the downward sloping pattern.
This would suggest Brent is headed for a substantial move, as "Flags" generally are a continuation patterns. The path of Least Resistance also suggests a move up.
But ATC suggests we watch out for the 125-126$ levels for Brent. That is where it had stopped last time. So it will probably find it a little tough to overtake that. (Unless there is Iran war tomorrow). If those levels are taken out convincingly then we might be headed for life time highs.
But technical analysis has ways to fool people and requires expert eyes. ATC surely doesnt have those. Maybe its not a bad idea to just keep seat belts ready....!!
Crude Oil - Big Move
Thankfully this was not as horribly disappointing as the call on the Nifty :)
125$ has not been touched yet. But the basic directional call has been proven reasonably fine. So I thought, maybe its not a bad time to see if the call can be taken further.
Source : Bloomberg
So ATC moves on and has managed to visualise a standard "flag" pattern. That can be seen in the white coloured parallel lines on the chart. "Flag" patterns are supposed to be consolidation moves for a previous move and the slope of the "Flag" is generally opposite to that of the previous move.
In this case that move happens to be the one from roughly 80$ to 125$ for Brent. Then we have now had a one year weekly "Flag" pattern. Brent has now broken out of the downward sloping pattern.
This would suggest Brent is headed for a substantial move, as "Flags" generally are a continuation patterns. The path of Least Resistance also suggests a move up.
But ATC suggests we watch out for the 125-126$ levels for Brent. That is where it had stopped last time. So it will probably find it a little tough to overtake that. (Unless there is Iran war tomorrow). If those levels are taken out convincingly then we might be headed for life time highs.
But technical analysis has ways to fool people and requires expert eyes. ATC surely doesnt have those. Maybe its not a bad idea to just keep seat belts ready....!!
2 comments:
Barking dogs seldom bite. Iran war wont happen. Though I am also bullish on oil, the trigger could come from something else.
There are some triggers in place already...Syria/Sudan/Yemen oil production loss is in the region of 1 mbpd....Libya is at around 1.1 mbpd which is still a loss of 5 lac bpd from its peak though its recovering...Saudi Arabia's spare capacity is a question mark....so we dont knbow whether a supply shock will hit us or whether the demand will fall enuf to offset it....it doesnt require a war with Iran...lesser supply from Iran and a little war-mongering will probably be enuf...you can gauge the sensitivity of the market from the reaction to the rumour yesterday ...it spiked to 128.5$ before Saudi came with a clarification...so its on the edge all the time!!!
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