Since 6/13/14 when the price of oil was around $120 it has gone lower and lower until 2/11/16 when it looks like the bottom was put in. It is 9/10/16 today and here is how I see it playing out. If price doesn’t break much below $37.42 then my projections remain valid. If price drops below and moves much lower than that then recalculations will be made.
The original projection for the low was $51.23. When price hit that level it popped up nicely and the next level of resistance was $60.37. I would have thought that price would not have broken below the $51 level and that the bottom was in but I was wrong.
Price did and I had to recalculate. My new low was projected to be at $37.42 where price bounced off of it a couple of times and my 1st level of resistance was $48.48 where price came and hit that as well. If price breaks much lower than the $37.42 level then the new target low would be $28.01 and if price hits that then I would go long looking for a target of $40.64. For now it looks like the bottom is in.
So far price is bouncing around nicely and when it does decide to make a break higher then the next major levels of resistance will be $66.30 -70.39 (lots of resistance in this area), 76-77, 82.91, 87.24 and 90.19. When the price of CL hits $67.88 then the recession in my book will be considered officially over since the 50% retracement will finally be completed.
I have no idea how long this will take and price could even go down and test the $37.00 level again (doubtful) before it moves back up but eventually as long as the $37 level holds then the price of oil will go back up to at least the $67 level and then the recession will be officially over. After that then it is a brave new world for the oil and gas industry and the new market will be well underway.
My long term bias is up so if you have an oil and gas stock or whatever you trade and are in it for the long term then I would feel very safe in going long here and buying any moves lower. If price moves down to the $28 level then I would load up on long positions there.
