Friday saw Brent Crude take out the resistance line from our developing Bear Channel raising the question about if we do in fact have a top in place. Well this is still possible but the Bulls are proving to be stubborn here and after a poor morning session yesterday they fought back well to close more or less where we started the day. We are still cautious here and our Bearish Engulfing pattern created on the 12th of May could still have a part to play. A print above our all time high at 127.65 is what is required to negate this possibility. To the downside we have our last dip at 121.85 giving protection to the 38.2 Fibonacci Retracement of the last leg up from the 1st of May that comes in at 120.97.
Indicators in Play
A Bearish Engulfing pattern occurs at the top of trends and consists of two candles. The first is a green candle that opens low and closes higher. The second candle opens above the previous days close and closes below the previous day open.
Summary
The same people that last year thought it was impossible to attain these levels are the same ones now that are saying there is no stopping this rally.
Well we are not jumping in too early but are poised to dip our toe to the short side with a stop above 127.65.
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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