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Thursday, December 30, 2010

Crude oil - A top now or just half way?

The weekly chart above shows the correction since the low in late January 2009. The last part of the correction since the low at 64.24 (late May 2010), does display some very interesting relationships.

The daily chart below show us, that the rally from 64.24 to 82.97 took 52 days the following correction corrected just above 61.8% of the rally. The next rally from 70.76 to 88.63 took 54 days and came close to the 50% retracement of the major decline from 147.27 to 32.40 (89.93).
The correction from 88.63 corrected 50% of the rally from 70.76 to 88.63 and we are looking at the third rally from 80.06, which has now reached the mid-point time wise as it has taken 27 days.
Could the rally be over? Yes it's a possibility, but it would at least take a decline beneath 86.83 to imply that. It's more likely we will see a continuation higher towards the 96.60 - 97.00 area over the next 26-27 days before ending the entire rally from 64.24. But stay alert if 86.83 gives away.



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