The final posting concerning the oil value on February 17th pointed to greater costs into April. Oil was at $55.59 per barrel and has risen 5.3% to this point. As talked about in February, oil reached the $55.66 degree which is important as a result of value exceeded the 38.2% retracement degree of the October-December decline.
As we are able to see under, oil has entered probably the most bullish season of the yr.
Chart 2-Oil Worth Annual Histogram (from 1983)
Beneath is the each day histogram of anticipated value for the month of March. The 20th has traditionally been probably the most bearish day of the month for oil. This can be a day so as to add to lengthy positions.
Chart 3- Every day Histogram for Oil for March
The histogram for April exhibits that there has traditionally been a peak on the 21st-22nd.
The $65 space seems to be an inexpensive goal by April.
Chart 4- Every day Histogram for Oil for April
The bullish components are:
*Seasonally, oil has entered probably the most bullish a part of any yr
*The month-to-month cycle factors up as depicted in chart 5
*Oil was down from late September via late December. When this has occurred up to now, value has been greater 4 months later in 18 of 22 circumstances (April). In different phrases, if oil sells off within the fourth quarter, the seasonal tendency to rally in March-April is enhanced
*If oil has risen within the first half of March, because it has, value has been greater in 16 of 21 circumstances one month later. This factors to the late April time interval denoted by the month-to-month cycle
*Sentiment helps the bulls.
Chart 5- Month-to-month Cycle
Right here is an replace of a sentiment measure. The ratio of two ETFs graphed under is a measure of sentiment. The UCO rises by twice the worth of oil and the USO rises by one time the worth of oil. A excessive ratio is an indicator of bullish sentiment whereas a low ratio is a sign of warning. Observe that the final excessive on this ratio was the excessive within the oil value. The ratio is at a low degree, a sign of very reserved optimism towards oil and never consultant of a high. For the reason that final posting one month in the past, this barometer has barely moved regardless of the upper crude quote.
Chart 6-UCO/USO Ratio