History may be about to repeat itself in February, being the most bullish period within the BULLISH SEASONALITY for Oil.
Even if it doesn’t turn out to be the case, by looking at the price action behaviour of the WTIC, we have a CHoCH on hand. This Change of Character in price action behaviour is likely to provide the stopping action of the strong downtrend.
What is likely to follow once we have a confirmed STOPPING ACTION over the coming days/weeks is the development of a TRADING RANGE with it’s boundaries being the lowest low shown on the chart and the high which we are likely to make over the next few trading sessions with WTIC.
Prior similar price action behaviour did result in a stepping stone re distribution pattern last year, which started in August and resolved itself with a breakdown in December.
Let’s see the motives of the smart money towards oil at current levels ? Will they accumulate the oil contracts or re distribute ? My guess would be a potential range trading for now, once we have set boundaries in place ( Support already in place awaiting resistance).
In any case, check this largest rally and compare it to prior rallies and that of August 2015. Can you see the CHoCH ( Change of Character ) ?
On a different note, with XAO challenge is to overcome that 5050 level in the short term on the upside.
Back with further analysis next week.
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