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Buy set-up evolving in US Crude

I’ve taken a look at US Crude across two timeframes using two different perspectives.

IG Analyst

Publication date : 2017-04-21T08:03:15+0100

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Source: Bloomberg

The first chart is the daily chart with the Ichimoku indicator overlay.

The recent corrective move saw price to $50.50 level, which importantly is the Kijun–Sen support level, the middle price of the past 26 periods. This is the second level of support after the price moved into the future cloud. Importantly, the Chikou Span remains above the price of 26 periods ago and this is a bullish factor. The future cloud Senkou Span A is currently rising, which also portrays a bullish technical set-up.

210417-US-crude

The second timeframe that gives a solid look at the current support level and supports my view that we have seen a low in US Crude is the four-hour chart.

In this chart the price structure can be seen moving below the middle average before breaking the first support level at $53.00. The following corrective move to $50.50 resulted in a small rally over four periods to fall again at (b). This new closing low has resulted in the RSI making a higher low (2). The current bullish hammer has the potential to finalise the double bottom at $50.50.

A move higher would confirm a swing buy signal in the RSI as the indicator moves over point (1). Also confirming the downside volatility is nearing an end, the top Bollinger Band is rolling back towards the price.

As a first upside target I would use the middle average value at $52.00.

210417-US-crude-4-hour

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