MCX Crude looks spooked, shaken, and violently swirled
Updated
Something has spooked, shaken, and violently swirled the crude markets.
What exactly is brewing with oil?
The rising and strong trendline that began in Apr 2020, has been tested twice on the weekly time frame earlier.
This week, it's simply taken out. Broken in one clean swipe. It's almost like a butcher's big solid knife has sliced through warm butter. That’s how the wide-ranging weekly bar with above-average volumes is describing itself to me. (Or maybe it's my hunger pangs that are causing me to view Crude so crudely. :-) )
Even though Crude is currently testing the rising 200dma, (which happens to be a strong support zone) the possibility of this zone holding appears rather bleak to me. The market and price action are always supreme. Yet, if this 200dma level holds, Crude may well continue to brew strongly and surprise me as well.
How much the downside lies ahead if and when 200dma gives away?
The ATH range of 5535-5719 has formed over a long period from Oct 18 and Jul 21. The manner in which it has given away is indicative of a likely sharp down move ahead.
The Fibonacci supports of (23%) lie at 5100 and 38% lie at 4279. For Crude to continue brewing with interest and to stay strong, it needs to stay above the 4279 level. There are multiple supports here in this range from 4279 to 4565. This zone may well provide some support, albeit for a short bounce. It remains to be seen how this zone supports and shapes out ahead. This will define its future path.
Such sharp reversal moves and the breakout failure often have a tendency to retrace to the extent of 50% (3622). Eventually, the 61% retracement level @ 2951 could well be a distinct possibility, if crude starts to trade below 4279 levels.
At this point in time, these lower levels do seem far-fetched. Yet for now, these appear to be a distinct possibility IMHO.
Time shall quickly tell if this is a strong brew or it’ll be weak and subdued.
Cheers until then.
What exactly is brewing with oil?
The rising and strong trendline that began in Apr 2020, has been tested twice on the weekly time frame earlier.
This week, it's simply taken out. Broken in one clean swipe. It's almost like a butcher's big solid knife has sliced through warm butter. That’s how the wide-ranging weekly bar with above-average volumes is describing itself to me. (Or maybe it's my hunger pangs that are causing me to view Crude so crudely. :-) )
Even though Crude is currently testing the rising 200dma, (which happens to be a strong support zone) the possibility of this zone holding appears rather bleak to me. The market and price action are always supreme. Yet, if this 200dma level holds, Crude may well continue to brew strongly and surprise me as well.
How much the downside lies ahead if and when 200dma gives away?
The ATH range of 5535-5719 has formed over a long period from Oct 18 and Jul 21. The manner in which it has given away is indicative of a likely sharp down move ahead.
The Fibonacci supports of (23%) lie at 5100 and 38% lie at 4279. For Crude to continue brewing with interest and to stay strong, it needs to stay above the 4279 level. There are multiple supports here in this range from 4279 to 4565. This zone may well provide some support, albeit for a short bounce. It remains to be seen how this zone supports and shapes out ahead. This will define its future path.
Such sharp reversal moves and the breakout failure often have a tendency to retrace to the extent of 50% (3622). Eventually, the 61% retracement level @ 2951 could well be a distinct possibility, if crude starts to trade below 4279 levels.
At this point in time, these lower levels do seem far-fetched. Yet for now, these appear to be a distinct possibility IMHO.
Time shall quickly tell if this is a strong brew or it’ll be weak and subdued.
Cheers until then.
Note
Crude currently on its southward track, albeit a bit slowly. It tested the breakdown levels. It traded around it attempting to cross over upwards. Its has been unable to cross over on the higher side for two weeks in a row now.Unless buying support comes in around 4980, weakness may well be visible in the coming weeks ahead.
Trade closed manually
Sorry guys, missed updating this idea.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.