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22 Feb 2016
Oil: Move above 36 will lead to further recovery in Brent – SocGen
Research Team at Societe Generale, suggests that after an accelerated down move towards pivotal support near massive descending channel limit at 27.25/25.00, Brent is showing early signs of stabilization.
Key Quotes
“Current monthly close should be watched closely as it could form a second consecutive hammer which suggests receding downside momentum. Monthly stochastic is sustaining above a pivotal floor highlighting 27.25/25.00 as key.
If we drop down to daily chart of May’16 expiry, Brent is piercing above a multi month descending channel. Moreover on hourly chart, it is evolving within an inverted H&S and is currently close to the neckline at 36. Daily stochastic indicator has given a bullish crossover which points towards possibility of upside break. A move above 36 will confirm the pattern and lead to further recovery initially towards 39/40, a projection for the up move. This will be an important hurdle and a weekly close beyond this will be needed for a larger recovery. Projected potential for the pattern would be at 42.”
Key Quotes
“Current monthly close should be watched closely as it could form a second consecutive hammer which suggests receding downside momentum. Monthly stochastic is sustaining above a pivotal floor highlighting 27.25/25.00 as key.
If we drop down to daily chart of May’16 expiry, Brent is piercing above a multi month descending channel. Moreover on hourly chart, it is evolving within an inverted H&S and is currently close to the neckline at 36. Daily stochastic indicator has given a bullish crossover which points towards possibility of upside break. A move above 36 will confirm the pattern and lead to further recovery initially towards 39/40, a projection for the up move. This will be an important hurdle and a weekly close beyond this will be needed for a larger recovery. Projected potential for the pattern would be at 42.”