Hi Traders! Oil short term forecast update and follow up is here. On March 17th I shared this “Oil Short Term Forecast And Technical Analysis” post in our blog. In this post, let’s do a recap of this setup and see how it has developed now. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club. Spoiler alert – free memberships are available!
My Idea
On the H1 chart, the price which was moving lower reached a key support zone that has formed by the 61.8%(92.590) Fibonacci expansion level of the first wave. The price respected this zone and is currently bouncing higher from this zone. Also, we could see that the price which was moving lower created a bullish divergence that has formed between the first low that has formed on 15th March 2022 and the second low that has formed on 16th March 2022 based on the MACD indicator. The price then moved higher and broke above the last high at 97.888 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence. Hence as per the book scenario, after a bullish convergence, we may look for corrections to happen and then further continuation to the upside. In addition to this, the ADX indicator gave a bullish signal here at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider these as evidences of bullish pressure. So based on all this, my short term view here is bullish and I expect the price to move higher further after pullbacks.
On the H1 chart, based on the above-mentioned analysis my short-term view was bullish here and I was expecting the price to move higher further after pullbacks. After the bullish convergence, the pullback that I was looking for happened with the price creating a bullish hidden divergence between the first low that has formed at 92.646 and the second low that has formed at 100.798 based on the MACD indicator, which we may consider as a fact provided by the market supporting the bullish view. Also, in addition to this, there were no signs opposing this short term bullish view. The price then moved higher further as I expected it to and delivered a nice move to the upside as you can see in the image below.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
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