OIL update - THAT'S ALL FOLKS!!...
February 14th, 2014
As many US subscribers will be able to attest, it has been f-f-very cold in the US for quite a while, which has helped to drive up the price of oil in recent weeks, but all good things come to an end sometime, and Spring is just around the corner.
Yesterday a bearish candle appeared on the Light Crude chart right at important resistance at the top of a trading range, which suggests that oil is reversing to the downside. This technical development was underscored by the overnight revelation that inventories have come in higher than expected. Thus oil is now expected to slump back across its trading range again and it is therefore viewed as a good short here, with a stop above yesterday's intraday high. Futures are already reacting but it should have considerably further to go on the downside.
Oil stocks look set to react back from resistance too, especially as they have had a good rally in tune with the broad market recovery rally in recent days, caused technically by the market bouncing from an oversold condition, and fundamentally by Yellen making cooing noises about going soft on tapering.
February 14th, 2014
Clive Maund is an English technical analyst, holding a diploma from the Society of Technical Analysts, Cambridge and lives in The Lake District, Chile.
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