Crude Oil Performance
When we look at Crude Oil are more drops expected? the last four weeks has lost near to 19 per cent after to reach the highest level of the year at 76.90 dollars per barrel. In the Friday 02nd trading session, Crude Oil dropped below the 63 USD per barrel. The sharp fall observed in the daily chart could be a little uncomfortable to make a trading plan.
Chart 01: CL – Crude Oil daily chart.
Reducing the noise
To reduce the uncomfortable noise of the sharp plunge, we will analyse the potential moves in Crude Oil watching different signals that could indicate the possible movement. In one hand, the VXXLE index (the CBOE Energy Sector ETF Volatility Index) has broken down the ascending trend line and currently is moving below the 5-days moving average, but RSI still moves above 50, indicating that the energy group still have bearish potential.
Chart 02: VXXLE – CBOE Energy Sector ETF Volatility Index Daily chart
In the second hand, the RBOB Gasoline (RB) has fallen under the Fibonacci level 161.8%; this situation makes us suspect that the energy group still have a bearish potential, which could fall to the zone between 1.6249 and 1.5481. If the price drops to this area, oscillators like MACD or RSI should show a bullish divergence as an exhaustion movement of the bearish cycle.
Chart 03: RB – RBOB Gasoline daily chart.
Bearish Continuation
The clue provided by the Gasoline chart, make us see that Crude Oil still have the potential of bearish continuation. For the coming sessions, we could expect a limited breath to the last consolidation zone between %66.09 and $68.00. From this area, we foresee more drops with the potential target in the area between $59 and $56.15.
Chart 04: CL – Crude Oil daily chart.
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