Technicals | Jul 30 2015
Bottom Line 30/07/15
Daily Trend: Down
Weekly Trend: Down
Monthly Trend: Down
Support Levels: 45.74 / 42.32 / 40.00
Resistance Levels: 65.00 / 69.00 – 70.00
Technical Discussion
'Lower certainly looks to be the path of least resistance for the moment.' In between reviews this has proven to be the case with price now back down hugging a reasonably strong support line. Needless to say if this breaks down then the potential for sub 40.00 prices really does become a full blown reality. The bears are continuing to have a field day with this.
Reasons to stay bearish below 65.00 :
→ surplus conditions globally continue to weigh on price
→ global geopolitical unrest now subdued
→ OPEC continues to remain sidelined in regards to surplus intervention
→ 45.74 support now under pressure.
There has been some speculative buying over the past couple of sessions yet this is something you would normally expect to see when price revisits areas of technical support. We have to go back many years to find this 45.74 support line yet it is there and it is reasonably strong as well. All the more reason to baton the hatches again if it is broken below which is naturally a possibility bases the strength of this longer term downtrend. Best case from here would be a double bottom forming, yet the trigger confirming this does not occur until 64.42 can be broken past. Until that time lower is simply the path of least resistance. Price is oversold across the board yet this really means for nothing when it comes to strong trends being in place, and especially when divergence is no where to be seen. So still very precarious here with only a move above 65.00 that sticks upgrading Crude Oil to a more neutral rating.
Trading Strategy
We see the potential for price to be bottoming out around the 45.74 support line yet it is way too early to tell. Any drop below here will be a shorting opportunity, whereas the double bottom trigger will provide scope for buyers to take on long positions. Anything in between we will just leave to the shorter term range traders.
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