Light crude oil prices made an impressive rally in March and April largely due to production cuts from Russia and OPEC. Global demand was also expected to increase, according to the EIA.

However, regardless of positive fundamentals, futures on WTI are being sold by institutional traders this past week. Their outlook is for lower levels and a pullback by about 10%.

Our models would agree.

The 1 year curve fitting models (chart 2) shows that WTI prices peaked at $66 and a retracement $57-$58 is coming. Ultimately oil prices are expected to reach the mid-$50 in the 2nd half of 2019.

Bottom line: Light crude oil prices appear to have peaked in price. Lower levels are expected in the months to come.

We suggest either selling most energy positions at this junction or tightening stops levels to protect existing profits.

By Donald W. Dony, FCSI, MFTA
www.technicalspeculator.com

COPYRIGHT © 2018 Donald W. Dony
Donald W. Dony, FCSI, MFTA has been in the investment profession for over 20 years, first as a stock broker in the mid 1980's and then as the principal of D. W. Dony and Associates Inc., a financial consulting firm to present. He is the editor and publisher of the Technical Speculator, a monthly international investment newsletter, which specializes in major world equity markets, currencies, bonds and interest rates as well as the precious metals markets.

Donald is also an instructor for the Canadian Securities Institute (CSI). He is often called upon to design technical analysis training programs and to provide teaching to industry professionals on technical analysis at many of Canada's leading brokerage firms. He is a respected specialist in the area of intermarket and cycle analysis and a frequent speaker at investment conferences.

Mr. Dony is a member of the Canadian Society of Technical Analysts (CSTA) and the International Federation of Technical Analysts (IFTA).

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