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Thursday 5 March 2020

Crude Oil WTi Chart Analysis - Part 2

As a Trader or Investor, we must adopt a contrarian strategy avoiding overcrowding, overbought, overvalue and overhype of an asset class financial instruments products.

There are so many bearish newsfeed on Crude Oil at the moment.

Recently i came across a news re-published from The Wall Street Journal (WSJ) by author Amrith Ramkumar on Crude Oil WTI that it had enter into a bear market with this headlines - Concerns about an international slowdown, coupled with swelling supplies, send crude on a six-week skid
"U.S. Crude Oil Enters Bear Market Due to Global-Growth Fears"

https://www.wsj.com/articles/oil-on-track-for-bear-market-due-to-global-growth-fears-11559748511?fbclid=IwAR2PJJv_J5ob6EL2d8uQBxH7PjVSnNI2ait6Ylevq1p5doDjHzosg6d6-PQ

Bloomberg published an article on Crude Oil WTi on 1 March 2020 that "A $30 Oil Price is the real virus threat to OPEC"

https://www.bloomberg.com/opinion/articles/2020-03-01/a-30-oil-price-is-the-real-virus-threat-to-opec?fbclid=IwAR1kAsZc-q0HlV_b_6vCPJeGZOBcRF3b-odLp0_J4hZWwaTJlZ32vOYjB40


"Will we really see Negative oil demand growth this year" on 4 March 2020

https://oilprice.com/Energy/Energy-General/Will-We-Really-See-Negative-Oil-Demand-Growth-This-Year.html

"Goldman Sachs : Brent Oil Could drop to $45 in April" on 4 March 2020

https://oilprice.com/Energy/Oil-Prices/Goldman-Sachs-Brent-Oil-Could-Drop-To-45-In-April.html

"Coronavirus Panic is causing a worst case scenario for Oil" on 28 February 2020

https://oilprice.com/Energy/Energy-General/Coronavirus-Panic-Is-Causing-A-Worst-Case-Scenario-For-Oil.html

"Oil Prices in freefall as Pandemic fears grow" on 27 Februrary 2020

https://oilprice.com/Energy/Energy-General/Oil-Prices-In-Freefall-As-Pandemic-Fears-Grow.html

I use this piece of article to cross reference with the Weekly Chart Technical Analysis of Crude Oil WTi and i found that this piece of news come at the right time to accumulate long positions because the price is at the lower band of the price channel low poised for a rebound technical rally. Many traders or investors would be psychology affected by this negative news published and may take a short position on Crude Oil WTi.

I understand media always like to overhype an issue of greed and fear, a famous quote by Warren Buffet be greedy when everyone are fearful and be fearful when everyone are greedy" This quote by reowned investor Warren Buffet is not easily applicable if one lacks understanding on psychology part of the trading or investing journey.

In this article how it derive Crude Oil WTi had enter a bear market so called technical bear is using April 2018 high with a drop of more than 20% which is around 76 estimated at the time dropped to 43 recent low on 2 March 2020.

The formula is computed by using 76 X 0.2 = 60 price and below is consider a technical bear market, My concern is why it was re-published at this time and i happened to pick up this piece of newsfeed initially published in 5 June 2019, if we did not look at the dates published carefully thought it is the most recent and up to date publications with the Headlines.

Weekly Chart With Technical Analysis









Base on Technicals, Crude Oil WTi is trading at undervalue range of lower band of price channel. Lower Band of price channel makes a nice support for Crude Oil to stage a rebound to 60 (medium band of price channel) and 80 at the upper band of the price channel once Coronavirus situation improves.

It is surprising that Crude Oil did not rally based on geopolitical latest conflict between Turkey and Syria and Coronavirus overshadow the Turky and Syria geopolitical conflict.

https://www.nytimes.com/2020/03/05/world/europe/putin-erdogan-syria.html

https://www.nytimes.com/2020/02/27/world/middleeast/russia-turkey-syria-war-strikes.html?action=click&module=RelatedLinks&pgtype=Article





Disclaimer: All news, information and charts shared is purely by my research and personal views only. This is not a trading recommendation or advice but on the basis of sharing information and educating the investment community. Different traders and investors adopt different trading strategies and risk management approach hence if in doubt please approach or seek clarifications with your Financial Adviser, Broker and Banker.








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