Oil looking wobbly

A couple of weeks ago, maybe a month, writing for the Prince over at MacroBusiness when WTI was above $90 Bbl I suggested it was going to head toward $80. Last week it bottomed out at $81.10 and has been trying to rally since.

But it still looks really fragile technically and Bloomberg has run a story this afternoon saying that

Oil Trades Near Three-Day Low on Europe Concern, Iranian Talks

So I thought I throw up a chart of Oil and see what it looks like.

Looking at the weekly first it looks like the MACD is suggesting, only a suggestion and based on my subjective use of this indicator – that a turn is coming. Equally $79.01 is a nice old trend line support going back a few years and has a few touches over that period.Crucially however it is unable – so far –  to get back above the uptrend line it broke down through recently. Tentative as this is it looks like it might want to test the more robust support.

On the daily chart above you can see the two trendlines a little more closely and while the MACD is coming back from an extremely oversold level and when taken with the Weeklies looks like a base might be forming the drop in momentum suggests a retest toward last weeks lows and likely a test toward the $79 Bbl support zone which should hold.

A break of here would open the way for a move to $76 and if this gave way $66.92.

My feeling is however that the next dip is one to buy for the longer term – but it does look like Crude has a few dollars to fall still yet. Time will tell.

Have a great day

Greg McKenna

www.twitter.com/gregorymckenna

Please remember these are not recommendations for you to trade these are my views and I have my risk management tools and risk parameters that you do not have access to. Thus, this blog is for information only and does not constitute advice. Neither Greg McKenna nor Lighthouse Securities has taken your personal circumstances, objectives or financial situation into account. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs.