• Oil slides more than 4.5% overnight
  • Downward pressure on Brent
  • Activated reverse thrust

 Brent oil price traced out a near-term top in June and July via the formation of a double top pattern. The resulting downward accelerated last week and the price action has finally lost the bull’s horns (50 & 100MA) and closed below the 12-month bullish trendline. The downtrend is set to reassert itself as the weekly RSI study unwinds a series of bearish divergence that formed between Jan and June. Yesterday’s low 71.50$ is serving as an initial downside target (corrective A-B-C corrective structure and KTM’s goal). Below here, the focus will move down to 70.80$ and 70.00$ May 2015 high. Nothing that the 200MAs finds between 68.80$-68.20$ below these the 38.2% fib reaction finds at 66.50$.

In the near term, the price has been capped at 75.50$; we would look to capitalize by using rebounds to 75.50$-76.30$ as a selling opportunity.

Turning to the medium term, we also expect the price will retrace further to 68.50$ and 66.50$ levels.

View: Target completed, wait for a fresh entry. We look to buy on dips with sl 61.00$.

Read:

Chart of the day: BRENT

Corrective ABC structure in progress

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