Oil forming a small h&s the last 3 days. neckline around 46.25. If neckline is broken convincingly, we should see one last downdraft before the real bounce/consolidation happens. We also see Price/RSI divergence forming. This usually takes 3 lower lows on price with higher highs on RSI. You can see we have 2. I have drawn the horizontal on the last RSI near 18.68. I think price can drop anywhere up to $10 from here and still stay above that RSI level, so $37 range. We should also pierce lower BB on that movewhich would be another good sign for a reversal.
If price/RSI divergence holds, I expect a return to the upper BB and the sma 50, somewhere in the mid-upper $50s. That would be a near $20 move, >50% move. Now, if we breach that RSI level to the downside, who knows where oil will finally stop. Not saying this is the bottom, just saying we are setting up for a bounce.
I am short near term, but long medium time frame
If price/RSI divergence holds, I expect a return to the upper BB and the sma 50, somewhere in the mid-upper $50s. That would be a near $20 move, >50% move. Now, if we breach that RSI level to the downside, who knows where oil will finally stop. Not saying this is the bottom, just saying we are setting up for a bounce.
I am short near term, but long medium time frame
