Today i would like to present the Point and figure method analysis of correlation between WTI Crude price and stock price of Oil Marketing Companies like HPCL.(HINDPETRO:NSE) The WTI crude corrected 2.38% yesterday. Let us see how the HPCL chart is postioned.The Crude price is a significant influence on balance of payments for India as the Crude is the highetst import biller. And if WTI corrects and sustains below $ 60, that will be a great sign for Indaian economy and stock markets.
The HPCL charts analysis is based on YTD data. And charts used for analysis are logarithmic scaled 1% X 3 Daily High Low chart and Daily High-Low 2% X 3 chart. The WTI Crude Oil chart is constructed with YTD data but the chart is Daily High-Low 2% X 2 chart. The HPCL last traded at 283.90(NSE) and WTI is trading at $ 67.04.
Let us have a look at the WTI Crude chart.
The WTI is in an Uptrend and the support line is breached once. But the on 2 box reversal chart are different than application of the on 3Box reversal chart. As of now the WTI is in sideways mode. The SELL signal level is 66.44 ( marked with Arrow ‘A’ on the chart)on the downside and 72.03 on the upside. The WTI Crude trend may change to down if it breaks the low of 62.53 marked as on the chart. The WTI breached and genrerated SELL signal yesterday(yesterday's low is $66.32).
Please note the Critical Price Point @ 60.05 is marked as on the chart and note down the monthly marking on the chart during the first quarter of the 2018. Please try to correlate the timing and CPP on HPCL charts with WTI chart.
Looks like if WTI sustains above the CPP that will be a problem for the OMC like HPCL due to subsidy burden.
Let us have a look at the HPCL Daily 1% X 3 High-Low chart.
The chart is showing the price action history for the past two months. The quadruple bottom break down at 301.25 is marked as , the resistance line is marked as , the trend changing point at 289.45 is marked as . The formation (Triple top break out followed by a break out) is called Catapult, which is a reversal signal. The Alert level 272 on the chart is marked as . The support line is marked with Arrow. The stock tested the yesterday marked with on the chart. Let us see how it will react to the WTI fall today. We can correlate the sideways action on WTI after making a high of $75 and the action here in HPCL stock.
Let us have a look at the Daily 2% X 3 High-Low chart.
The resistance line is marked as , the Ascending Triple top break out shaded in yellow is marked with and the Trend changing point @ 298 is marked as . Please try to correlate the Critical Price Point on this chart and the WTI chart.
Now the HPCL charts are showing signs of Bias change, can we say WTI will fall from this levels and the bias changes from Up to Down?!
Keep watching the Alert levels marked on both the charts.