Monday, August 31, 2015

Are better days coming for oil? 2 possible scenarios.

Oil after touching 37's bounced hard towards mid-40's. A month ago we suggested that oil would move towards 36-37$ and then bounce hard(Oil at crossroads).

Currently oil is approaching a strong resistance zone at 48-50$ where the current upmove will probably stall.From that point onwards we can see two possible scanarios :
A)A V-shape bottom scanario where oil will move above 50$.
B)Oil will bounce at 48-50$ (or even lower) and then move towards 38-40$ at which point it will reverse and move towards 44-46$, where it will face a substantial resistance zone.This one is our prefered scenario currently and it is a scenario that potentially can lead to a longer-term bottom formation

Again Energy sector (XLE) moved according to our plan and bounced at 59-60.We believe that the current upmove of XLE will stall at 68-70$ and then probably it will move again towards 60's or lower.