Near term crude oil outlook:
The market remains heavy recent lows as the view over the last few months of a downside "washout", ideally into the longer term $34.00 area (year long falling support line) and ideally into the mid/late Dec time frame, has indeed played. Additionally seen as an "ideal" area to form a potentially more major bottom (see longer term below). Nearer term lots of positives also raise the potential of an important bottom nearing and include an oversold market after the last few months of sharp declines and seen within the final downleg in the decline from the Oct 9th high (wave v) as well as the larger decline from the May high at $62.58 (wave 5). At this point, there is still no confirmation of even a shorter term bottom "pattern-wise" (5 waves up for example) and with thinning markets on the approach of the end of the year, there is scope for a period of chopping and even further, but likely limited downside. Support is seen at the earlier $33.75/00 low and the base of the bearish channel since Nov (currently at $32.75/00). Resistance is seen at the bearish trendline from Dec 4th (currently at $35.75/00), with a break above likely to trigger at least some stops. Bottom line: within an "ideal" area to form a bottom (and potentially more major bottom), but no confirmation of even a shorter term low so far.
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