In my pursuit of revealing the secret language of Indian equity space through charts, I often study the Crude Oil for subtle hints of what might be coming soon.
This time around I made some very interesting observations, totally worth sharing in a blog post.
For those to who prefer a picture over 1000 words, you'll probably appreciate the wordless video below just capturing the essence of my analysis.
First look on the crude oil chart indicates change in trend from down to sideways
If you are wondering why 177 min charts- it is simply 1/5th of the number of trading minutes in a day for this security. I like to break the time frames into factors of 1/5th as I go one level lower.
In the chart there are multiple positive divergences clearly visible between price and RSI indicating that this sideways movement is hiding a gain of momentum on the days prices move up and a loss of momentum on the days prices go lower. This is like the tipping point in a trend. The beauty of RSI is that it capture this very subtle change with bold colors and loud divergences.
The 35 min chart showcases RSI range shift, meaning that during the down trend the RSI was oscillating between below 30 to 60 level but now even when prices come back to the lower levels RSI maintains its lows well above the level of 30.
Most interestingly this phenomenal shift has been noted after the Selling Climax which resulted in RSI reaching deep below 30 in the last major down-leg with new bottom price.
On the support side we are looking at 6000 to hold in the near future and provide a foundation for intermittent rallies. While on the resistance side there are three key levels, the resistance 1 is 6749 this has been retested multiple times
The stretched target of 7679 which can be achieved if there is a wild rally in Crude and the logical target or second resistance level of 7224-7240 range. We expect this second resistance to come as a potential halting spot for the Crude oil due to much noted price activity in the past. This is a strong psychological level for crude.
This is all we have for now on this key commodity. Please let me know your thoughts in the comments below.
Thanks for reading!