Chart of the day: The Bullish Case For Oil

falls on the news that John Bolton, the ruthless national security adviser of US President Donald Trump, has been fired. This is seen as mitigating military risk, which in turn pushes oil prices down. There is, however, another view that US stocks and shale production are declining, exacerbated by improved trade relations between the US and China, which are very likely to raise oil prices.

reported that the stock fell by 7.2 million barrels in the week ending September 6 to 421.9 million, much more than the expected 2.7 million barrels. Analysts expect the withdrawal to confirm as 4.8 million barrels.

As far as American production is concerned, there are signs of shale production weakening, with production shrinking to less than 100,000 bpd during the first seven months of the year, compared to an increase of 600,000 bdp during the same period in 2018

STI Daily Chart

Despite the fall in oil prices following the news of Bolton's departure, prices remained above both the downward trend since April and the 100 DMA. Currently, prices have recovered from a dip and are in a positive area.

The trade pattern since the low of August has developed a small ascending triangle, the rising low of which shows an exaggerated eagerness with respect to the flat supply at the top of the cartridge.

The 50 and 200 DMAs are intertwined, because the fall from October 2018 and the rise since December 2018 are struggling for trend control, with explosive potential.

The MACD gives repeated buy signals after a series of bounces from the short MA to the long MA and moves it back above the zero line.

The RSI shows that the momentum supported the price outbreak, after offering a positive divergence as it rose from June to August while the price fell.

From now on, the short-term trend has risen, following the adoption of two rising peaks and troughs from the bottom of August, while the medium-term is sideways.

Trading Strategies – Long Position Setup

Conservative traders can wait for the price to fall back to the bottom of the channel above the downward line since April.

Moderate traders can risk a position on every return to the canal floor after it has found support.

Aggressive traders can now take a long position, depending on the support of the falling line since April and the triangle top.

Trade sample

Input: $ 57 Stop loss: $ 56 – below the convergence of the falling line of April and the top of the triangle. Risk: $ 1 Target: $ 60 – Round number psychological resistance among high in July. Reward: $ 3 Risk: Reward ratio: 1: 3

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