Brent Crude looks to be heading higher from here

Brent Crude looks to have started a second leg up off the January bottom of 45.22, indicating Brent has a good chance of heading higher from here. A decisive drop below the most recent swing low at 52.61 changes the bullish scenario shown in the below daily chart.

Weekly Chart

  • Most recent 45.22 January low completed a 61% decline from the 115.68 June 2014 peak (over seven months), and a 64.8% drop from the 2012 peak of 128.37.
  • Just prior to the low Brent completed a 88.6% Fibonacci retracement – at 47.07, of the three-year 250.6% rally that peaked at 128.37 in February 2012.
  • RSI on a weekly basis was extremely oversold at the January bottom – the most in at least 10 years

Bullish signs:

  • January low was followed by 39.3% rally
  • Subsequent retracement hit a low of 52.61, almost reaching the 61.8% retracement at 52, and bouncing
  • Next target for Brent is 70.36, the 100% completion of an AB:CD move off the January bottom
  • Higher price levels to watch are:
    • 13 : 38.2% retracement of prior seven-month decline
    • 15 : CD leg = 127.2% Fib extension of AB leg
    • 45 : 50% retracement
    • 33 : CD leg = 161.8% Fib extension of AB leg
  • Crude Oil Daily Chart

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About the Author
Bruce Powers, CMT, has over 20 years experience in the financial markets. Previously, he was President at WideVision, a Dubai based FinTech and IT services company, which published, and where he also was Chief Technical Analyst. For the past eight years Bruce has written a weekly column on the UAE stock markets titled \'On the Line\' for the Gulf News newspaper, and has appeared numerous times as a guest on TV business shows. Bruce is a Chartered Market Technician (CMT) and until recently served as Co-Chair of the CMT Association Dubai chapter, which he Co-founded.

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