OIL: One Final Push Before The Big Drop?
A commodity plagued by supply and demand like non-other. Reaching a high of $66.50 before forming a large reversal pattern. Looking at the 4-hourly chart we can see a clean head and shoulders pattern. We look to be coming back to $63.00 per barrel level to re-test the underside of the neckline. Let's dig into this a little bit further as there could be a larger move at play.
Looking at the Monthly and Weekly charts, we can see that we looked to have formed a new lower swing high just below our weekly resistance at $67.00. If we take a fib from our 2018 high to our 2018, we can see its come into a very nice region, and given us bearish candlestick formations -two confluences already!
The $63.00 level really starts to take shape on the 4-hour chart, showing us a clear line in the sand and great support/resistance as well. A clear rejection of this level and its further downside in my opinion, quickly as well. A break and closure above this level and the trade is invalidated, with minimal risk laid out. Our first target would be $60.50 then further downside at $58/$57 giving us a great risk to reward....