Back in the Symmetrical Triangle – What’s next?

Oil palm tips:

  • Crude oil prices hit about $ 94/brl last week, a level below the market since Russia invaded Ukraine in late February.
  • Technological disasters have occurred, but the reasons have not changed: supply shortages are competing with global economic concerns.
  • According to the IG Client Sentiment Indexpure oil prices have a bearish bias in the near term.

Delay against supply

Global energy markets continue to be volatility as consumers weigh in on competitive needs: slowing economic growth among developing industries with a lack of improvement in energy supplies in the near future. The result of the net was a wash, with refined oil prices hovering at around $ 105.00/brl, a level that has been held for four weeks. The entire article continues: “the global economy is not given more than energy, and there is not enough financial security that can fix the global supply chains plagued by war. Russia’s threat to Ukraine or China’s zero-COVID policy. “

Weak oil, oil management

Oil prices have the same relationship with volatility as most other commodity classes, more so that consumers of real estate – other energy resources, soft and hard metals, for example. Such as Firms and stocks don’t want to increase volatility – signaling greater uncertainty about cash flows, shares, coupon fees, and more. The stability of the oil between washes and then returns to clean oil prices left correlations unchanged, if not weak.

OVX (Oil Volatility) Technical Analysis: Daily Stock Market (July 2021 to July 2022) (Table 1)

Predicting the price of oil: Back to the Symmetrical Triangle - What’s next?

Oil volatility (as measured by Cboe’s gold volatility ETF, OVX, which tracks the volatility of oil compared to 1 month obtained from the USO option chain) is trading at 54.28 at the time of this writing, holding near its highest level since the beginning of May. The 5-day relationship between OVX and oil prices -0.38 Even a 20 -day relationship -0.82. Oprayed, ma July 5, The relationship is 5 days -0.95 and the meeting shall last 20 days -0.80.

Petroleum Price Technology Information: Daily Index (July 2021 to July 2022) (Figure 2)

Predicting the price of oil: Back to the Symmetrical Triangle - What’s next?

Oil prices are currently on track to rise from December 2021, April 2022, and May 2022, but have returned to a symmetrical triangle somewhere since the end of February. The technology crash has occurred, but it is not enough to expect bullish results. Oil prices are back above their 5- and 8-day EMAs, but below their 13- and 21-day EMAs; the EMA envelope remains in a bearish trend. The daily MACD continues to decline below its signal line, but the daily Slow Stochastics have started to rise again to their midline. Momentum is starting to turn the corner, but it’s not enough to think of a low performance.

Oil Sales Training: Weekly Schedule (March 2008 to July 2022) (Figure 3)

Predicting the price of oil: Back to the Symmetrical Triangle - What’s next?

During the week, the weather continues to be cold. Oil prices are below their 4- and 8-EMA each week, but remain above their 13-EMA each week. The weekly EMA envelope setting is neither bearish nor bullish. The weekly MACD continues to decline above its signal line, and weekly Slow Stochastics are holding their midline. As was the case at the end of June, “if the bearish result had not been shown to fail, the time of each week may not have shown that kind of development; Looking at the 4 o’clock and daily time periods are appropriate.

IG CLIENT SENTIMENT INDEX: PRICE PERMANENT OIL (July 11, 2022) (CHART 4)

Predicting the price of oil: Back to the Symmetrical Triangle - What’s next?

Oil – US Crude: Retail retail data shows 49.20% of traders are net -long with the ratio of short and long -term traders at 1.03 to 1. Most net traders -long was 5.78% higher than yesterday and 0.65% higher than last week. , While the number of net-short traders was 1.34% higher than yesterday and 0.49% lower from last week.

We often underestimate public opinion, and the fact that traders are a short -sighted target of oil – the price of U.S. Crude can continue to rise.

But there were fewer trades than yesterday compared to last week. Recent changes in sentiment suggest that the price of Oil – US Crude could soon return to lows even as the consumer stays short.

— Written by Christopher Vecchio, CFA, Senior Strategist

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