Oil has a history of bottoming in late January.
Oil tends to have strong returns in February and March.
Oil had a lot of volume around the $25-30 level when it broke out years ago, while a falling wedge pattern is developing on the charts.
Look at the volume on the recent decline. Is this capitulation?
Although the 5 year range is distorted, if inventories stay flat, they will drift into the distortion and that changes the narrative.
Traders have been piling into $30 and $25 US put options on the oil futures contract.
Strong support with a bullish technical pattern, maximum pessimism and seasonal strength all add up to a good chance of a strong bounce.
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