USOIL Calls For A Bottom Look Premature
- Bottom pickers look early
- We’ve seen this price action before, several times
- A bottom might not be far off, but recent activity suggest lower before higher
Lately, there has been no shortage of chatter surrounding Crude Oil, and with that, also a lot of calls for a bottom. While I agree it appears to be late in the move to initiate new short positions (-57% decline since July), I don’t believe we have the type of price action supportive of a bottom yet. The price action the past couple of weeks has been uninspiring, with nothing more than a move sideways. This lateral movement, a flag pattern if you will, during strong trends more often than not acts merely as a pause before another push takes place in the direction of the prevailing trend. I’ll be sitting tight waiting for more convincing price action before taking action from the long side.
USOIL Daily: Apr ’14 – Present
---Written by Paul Robinson, DailyFX Research
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.