The last time we talked about Brent Crude was at the end of March. Back then we had defended the38.2 Fibonacci Retracement of the move up since January at 992 and looked to be on our way back to test the 17th of March high at 107.97. Well against the odds we saw one more sell off but the Bulls defended this Fib once again and this time sustained the rally reaching a high yesterday at 107.78. We fell back from here leaving us with a Spinning top. Yesterdays low at 105.72 carries great importance now and would signal a second failure if breached.
Indicators in Play
Spinning Tops occur at the top or bottom of trends. They consist of a small real body and long shadows or wicks in either direction. The wicks represent the range and the body is where we opened and closed. This type of candle shows an evening out in the balance of power between the Bulls and Bears and is a reversal pattern.
Summary
A break below yesterdays low at 105.72 would see us playing to the short side with a stop above 107.97. If this happens then we would expect to be testing the Fib at 992 once again. Our usual advice of patience applies here though as consolidation at these levels would set us up for an attempt on the highs.
David has been
analyzing and trading the worlds financial markets for the past 25 years. After an initial grounding with Mercury Asset Management and Warburg Securities he went on to set up his own brokerage operation in London. Since then he has appeared regularly on Bloomberg Television and been involved in providing analytics on behalf of some of the worlds major exchanges. He is also a member of the Society of Technical Analysts.
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