Firstly its a little early to look for the demise of the bull market, especially since there is NO technical signal to suggest that the bull market is about to end !

Technical Analysis

1. Support -Taking the trend lines, support lies at 52.5, 50, and 45.

2. MACD - (Bottom indicator) Suggests that the correction has further to run, and will likely cross and move towards the support area just under 1.

3. 50 week Moving Average - Also suggests the correction has further to run with a move to or a break of to indicate an end to the current correction, presently at about 47.

4. Uptrend Line - This is the main support line, and is currently at 45, this being the critical support level and likely to hold any correction.

Stop-Loss - Therefore the downside risk / target appears to be limited to between 45 and 47.

Target - The Mid channel line (green) taken from the uptrend line projects 12 months forward to 67.5 (i.e. 52.5 +15). Thus it is highly likely that Crude Oil will trade at or above 67.5 at some point during the next 12 months, as long as the support at 45 holds.

As the downtrend IS still intact, it would be wise to WAIT for an END to the downtrend before considering any sort of Long position in Crude oil. One trigger that I tend to use is a break of the preceding short-term high, which at this stage lies at the previous high of 58.

Nadeem Walayat

(c) MarketOracle.co.uk 2005 - 2006

Disclaimer - This Trade Scenerio is provided for general information purposes only and you are reminded to seek independent professional advice before entering into any investments or trading positions. The Market Oracle is a FREE Financial Markets Forecasting & Analysis online publication. We aim to cut through the noise cluttering traditional sources of market analysis and get to the key points of where the markets are at and where they are expected to move to next ! http://www.marketoracle.co.uk

This article maybe reproduced if reprinted in its entirety with links to http://www.marketoracle.co.uk

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.