CLQ12 - Update for June 22nd, 2012

Price analysis for the week of June 22nd, 2012:

Have Moved From July to August CLQ12

Market Overview: The bearish resolution to last weeks consolidation has opened the very noticeable target of $76.33 (August, 2012 contract) to be hit over the coming sessions. While the push into the 70's itself left the market rather oversold, there is little bullish enthusiasm of late as the market desperately searches for a bottom. The weekly chart does suggest we are into a support zone, so once the current daily AB=CD target is hit, my downside expectations will be rather curtailed until the important low of 74.95 is taken out.

Trading Strategy (1 month): Significant damage has been done to the Crude oil bull that it may take quite a bit of time to clean up the mess. While 50% levels may be hit over the coming months/quarters, I would be surprised to see too much of a rally any time soon. Having said that, price action is so volatile that even an intra-day 50% bounce can translate into many thousands of dollars of profits - a day traders dream!

Trading Plan for this coming week: Look for a test of the hourly 50% level at $81.14 and how it acts after that event. If the market can recapture the important low of $81.39, we may see a dramatic rally back up into the original topping area of $83.81-84.72. Keep your eyes peeled. 

Focus for the week: Using the hourly chart for targets/breakouts and the 9 period ema on the 15m chart for entry points..

• Should the bears remain in control, they will break the market's significant recent low's at $79.77 & $79.46. Should those be broken in earnest one would then have to expect a serious test of the  $77.50-$78 original bottom. Should that are be broken I will then be looking for a resolution to the current daily bearish AB=CD pattern target ($76.33)....

• Should the bulls take control, they will push prices back up through the significant resistance point of $81.15 (hourly 50% level). A consolidation with a subsequent breakout above this level would imply an even larger bullish Inverted Head & Shoulders price pattern. That pattern suggests one ought to be looking for a test of the $84.50 area for completion....

Update as of Wednesday, June 27th

That's all for this post,
Brian Beamish FCSI
The Canadian Rational Investor
the_rational_investor@yahoo.com
http://www.therationalinvestor.ca
http://crisdaytrading.blogspot.ca/