- The bull relief zone held perfectly.
- Oil prices are up 5.50% for the month and 3.90% for the week.
- Even after very bearish OPEC production reports oil rallies 300 ticks.
- We remain short – mid term bullish on the commodity
It´s pretty safe to say that we nailed the bull relief level. The reaction of the 41.30 level was as expected. Short term shorts took profit and mid term bulls added to their long positions and price soared 300 ticks. Comments from the Saudi Oil Minister about a possible meeting between OPEC and non-OPEC producers to take action to stabilize the markets fueled this rally.
Oil made a new weekly high (44.14) almost hitting our first target at the 44.25 / 50 level. We continue buying dips and are looking for a retest of the 42.50 level to go long again. As stated before, technically speaking we haven´t hit our first long targets yet so we believe that a small retracement to the 43.30 level during the European session could ignite a a short term rally to those targets.
We are closely monitoring price and if we don´t get that deep 50% retracement we will look for a break of the 44.50 level for a run at our second targets at 46.80.
Let´s have a look at this fibonacci cycle too. Price rallied from the August lows then bounced from the 50% stopping at the 113% extension. If the cycle continues we would expect a bounce of the pivotal 42.50 level which is also the 50% of the first leg of the cycle.