Just a quick update of what we at Chartfreak were looking for with Oils recent plunge.
OIL – Nov 20th, I was telling my readers that I would be watching for a break above the 8 ema, to make a safe entry at a swing low. Each pause sideways was breaking down ( Bear flags) .
NOV 23- Each pause in the drop remained a bear flag, the 8 ema still capping any progress
WTIC NOV 27th – This is very oversold and also we were keeping a cycle count. The daily cycle near 70 days was VERY extended, so again, we are watching for a break out above that 8 ema ( or 10sma) .
WTIC NOV 29th, we had a reversal or pause and it was late time-wise, so we stayed on alert for a break out
I even did some research and looked back at another similar deep sell off ( in the summer of 2015), and saw that it lasted 61 days , then after the break of the 8 ema, it eventually bounced to the 50sma. A good trade with leverage or options.
We finally had our break out, and this could be a signal to go long (with a stop) .
DEC 5th ( Today) we have a swing low and a back test.
THIS IS WHAT WE HAVE WAITED FOR AS A SAFER ENTRY , WHERE WE CAN PLACE A STOP AND AVOID GUESSING
SO I also was monitoring the XLE with Oils sell off – IT RESISTED OILS SELLING TOWARD THE END.
XLE NOV 29 – We saw a falling wedge and I would expect at least a run to back test the 50sma, but possibly more if this is a yearly cycle low in Oil.
XLE POPPED on Dec 3rd and…
XLE #1 – It dropped with the Tuesday Market sell off. So far, we have a Back test of the 10sma & Higher? Or…
XLE #2 – Back test the wedge & Higher?
Time will tell, but a stop can be placed under recent lows , and you may even choose to trade options or GUSH.
So this is how we have been tracking OILS big sell off, and the possible opportunity that could come after a low forms. We are also looking at Oil & Energy Stocks. Will the market sell off drag them down? I will update these developments in future premium reports. We may have a major buying opportunity here, time will tell 🙂
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