Crude Oil Technical Analysis – 16 April 2013

April 16, 2013 in Crude Oil by Shivakkumar Vadiveyl

Crude Oil Technical Analysis – 16 April 2013

Weekly Perspective for Crude Oil

This is a technical analysis of crude oil using Elliott Wave Analysis. The crude oil price has been forming a contracting triangle (in amber) in the weekly chart as shown below. This contracting triangle has been in place since June 2010. Contracting triangles can break either side (to the top or bottom). We can only confirm the direction once the price has broken out of the triangle.

Crude Oil Weekly Chart - 16 Apr 2013

On the longer term view, should the crude oil price break out to the top side, the target prices are USD 128 and USD 145. This is based on the Fibonacci relationships as well as the measured move using the widest part of the triangle. On the other hand, a break to the downside will give a crude oil price target of USD 36.

Contracting Triangles are normally made up of five sub waves. In the case of crude oil, it appears that there are enough sub waves in place and it is likely that the final sub wave is in progress. A break out of the contracting triangle is likely to take place soon.

Daily Chart for Crude Oil

Next, we zoom into the daily chart for crude oil. Here too, we can see that another contracting triangle has been forming on the daily chart. This contracting triangle has broken to the downside. Based on the measured move method, we get a target price for crude oil at USD 69. One of the characteristics of contracting triangle is that once the price breaks out, it normally results in a vigorous move. The nature of contracting triangles is to pause the bigger trend and move the price sideways. It normally takes its time to pan out. Once it is complete, the previous trend will continue and it will result in a strong move.

Crude Oil Daily Chart - 16 Apr 2013

This can be seen here as well. The crude oil price has started to slide vigorously to the downside once the price broke out of the triangle. The bottom line of the larger contracting triangle would likely provide support at USD 81.50 region.

Tags: Commodity, CRB, Crude Oil, Elliott Wave Analysis, Stock Market Charts, Technical Analysis
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by Shivakkumar Vadiveyl

Coal Technical Analysis

January 3, 2013 in Coal by Shivakkumar Vadiveyl

Coal Technical Analysis

The price of coal has been continuing its drop since our last review of coal prices in our Sakari Resources article back in May 2012. In that review, we had forecast two possible moves for coal. One was that price of coal would drop to around 76 USD before moving higher to 200 USD. The second one is that it would drop to around 15 USD. The coal price is at 89 USD as of Nov 2012. This chart is available at Index Mundi.

Coal Price Chart

When we analyse the updated coal price chart, we can see that the Primary wave C has been shallow compared to Primary wave A. This tells us that the slide in the price is likely to be capped to a fraction of Primary wave A. Looking at the internal wave count of Primary wave C, we arrive at 60 USD for the end of Primary Wave C. If we then take 61.8% of Primary wave A, we get 53 USD as the target price of coal. This means that the likely target range is between 53 to 60 USD.

Once this range is hit, coal price is expected to start on the next price cycle. We do not know as of this moment whether the price would remain at low regions or whether it would climb higher. We would need to let the market show us where the price would be headed thereafter.

The important take away from this coal price chart is that the price of coal is still on the way down. This indicates that commodities in general are still in a corrective phase and have some way to go before bottoming.

Tags: Commodities, Commodity, CRB, Elliott Wave Analysis, Technical Analysis, Thermal Coal Price Chart
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by Shivakkumar Vadiveyl

Crude Oil Chart – Trapped in a Symmetrical Triangle

December 21, 2012 in Crude Oil by Shivakkumar Vadiveyl

Crude Oil Chart – Trapped in a Symmetrical Triangle

In this article, we present the technical analysis of crude oil. Below is the crude oil chart which highlights the crude oil price being trapped in a symmetrical triangle. First off, there are a number of criteria that must be met for a symmetrical triangle as not all triangles are really triangles. You may refer to the article on Triangle Pattern for the complete list of the criteria for triangles. The reason why I brought this up is because, this triangle does not meet a number of those criteria. But, having looked at this crude oil chart, this is the best analysis that I can give at this point in time.

Crude Oil Chart - 21 Dec 2012

The analysis starts at the height of the bull run on the oil market in July 2008 when the crude of price was sitting close to 150. The price came crashing down all the way to 33 by Jan 2009. This move is labelled as Primary wave A in this crude oil chart. The crude oil price then recovered in a much more slower pace than the crash. The recovery took the crude oil price all the way to 114. Thereafter, it went into a sideways whipsaw which looks like a triangle. This whole recovery is labelled as Primary wave B.

Primary wave B might have ended but we can only confirm that once the price breaks to the bottom of the triangle. That is the reason why this wave is labelled with a question mark. If indeed it has ended, the crude oil price is likely to head lower to complete Primary wave [C]. The target for this wave is 33. This is derived from the widest part of the triangle.

The Alternate count states that Primary wave [B] is still in progress and the triangle is like to break to the upside. In this count, we have two possible targets. One target for crude oil is 128 which is the length of Major wave W. The second possible target is 145 which is measured using the widest part of the triangle.

The triangle holds the key to the crude oil price going forward. It could really go either way.

Tags: Commodities, Commodity, CRB, Elliott Wave Analysis, Elliott Wave Principle, Elliott Wave Theory, Elliott Wave Update, MACD, Technical Analysis
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