Monday, December 24, 2012

Crudeoil - Technical Update

  1. We can see a diamond pattern developing on the weekly chart above. More often than not it will act as a reversal pattern.
  2. But the pattern may not be complete as of yet. We might need another leg up, before we can say that the pattern is done. We should get resisted at the upper boundary line of the pattern and subsequently break down from the pattern lower boundary to confirm it to be a diamond reversal pattern.
  3. On the other hand we might just breakout from the upper boundary, but in that case the pattern we are thinking to be a diamond reversal, will turn out to be just another continuation triangle.
  4. The key lies in following what the market is doing presently, and for that we might need a closer look, lets look at the daily fractal.
  1. On the daily fractal, I could spot an Inv HnS, I might be looking too hard for a pattern here, but as long as we get a good trade out of it, its alright.
  2. We may have actually broken out of the NL, but the volume is not conclusive yet. If we are to continue up, we should see good volumes sooner than later.
  3. The target for this Inv HnS sits pretty around 5290, conspicuously close to the upper boundary of the pattern. So should we see a good up move in CrudeINR, we should see some resistance coming around the upper boundary of the proposed diamond pattern and/or 5290-5300 levels. We are forming a small consolidation right at the NL, I feel I would be buying any BO from this consolidation, with SL at its lower extreme.

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