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Andreas Zanin
Analysis | October 11, 2021

KTM Commodity Weekly: Final leg higher-update

As expected, Brent crude oil climbed beyond our target point of $82. The black gold finished higher for a fourth straight week.

Last time, the price climber higher for six straight weeks between May and June and twice recorded for seven weeks and one time for six weeks. The below chart shows three times the price recorded 12% (rounded) gains in a single run followed by 35% and 55%. We are sitting at the fifth weekly run; subsequent week closing will be providing more clarity. However, we believe we are at the final wave of leg higher as per the available pattern.

 

Oil prices rose 9.30% in September alone, which was the most significant monthly gain since January 2021.

Looking ahead, we feel brent crude oil may face stiff resistance between $82-$83, which is the 100—fe or wave C. A daily close above could propel further towards $86, the 123.6fe, and $93 161. fe. The previous swing high was located at $86.50, which coincides with 123.6fe. Hence, $82 and $86 level levels are crucial to focus on.

Looking at the daily chart, the price halted the top-end of the rising channel, and the RSI is marking a negative divergence along with a bearish oscillator. Overall, the weekly outlook is mixed. Support exists at $79.90, $78.80 and $76.40.

While shifting focus to the more extensive time frame weekly chart, the trend continues to remain North. Readers should not forget Golden crossover pattern is still healthy on the weekly chart. Any correction in the near term will be limited. Even though the signal at the daily chart is not bullish, weekly and monthly signals still support the North journey.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

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