Crude Oil & Oil Stocks Seasonality & Year-End Outlook
Tuesday, October 30th, 2012
By: Chris Vermeulen – www.TheGoldAndOilGuy.com
Crude oil has had some large price swings this year and another one may be on its way. This report shows the seasonality of crude oil along with where oil is trading and what the oil service stocks are telling us is likely to happen going into year end.
Since WTI Crude Oil topped out in September at the $100 resistance amount (Century Number) many traders are looking for a bounce or bottom to form in the next week. Historical charts show that on average the price of oil falls during November and the first half of December.
The charts of oil and oil stocks shown below have formed patterns on both time frames (weekly & daily) that lower prices are to be expected. If you did not read my Gold Seasonality Report I just posted be sure to review it here: Gold Seasonal Report
WTI Crude Oil Weekly Chart:
Here you can see that price tends to fall going into Christmas and rallies during the last week of trading. This price action falls in line with Dimitri Specks seasonal chart providing us with insight as to what we should expect. Later this week I will end my report on the Election Cycle Seasonality report which shows weakness in the market during Oct & Nov when a president is up for re-election.
MORE INFORMATION HERE>>>>>>>CRUDE OIL PRICES
Crude Oil Price
Oil Services Stocks – Weekly Chart:
If you follow oil closely then you know likely know already that oil related stocks can lead the price of oil by a couple weeks. What this means is that if huge money is flowing into oil stocks (bullish price patterns with strong volume), then you should expect the price of crude oil to rise in the coming days. That said, if money is flowing OUT of oils stocks then lower or sideways oil price should be expected.
The weekly chart oil stocks show a very large bearish head & shoulders pattern. While I do not reckon the neckline will be kaput it is very possible.
One of the most vital pieces of data on the chart is the VOLUME. Notice the lack of it… Volume tells us how much interest and power is behind chart patterns and declining volume clearly tells us these investments are out of act of kindness currently and that huge money is not moving into them.
Oil Stocks Weekly
Oil Services Stocks – DAILY Chart:
Zooming into the daily chart of the oil service stocks we can see there is yet another bearish pattern unfolding. Another head & shoulders pattern which looks as though it is just starting to breakdown as of this writing. Next support amount is $35-36.
Crude Oil Stocks Daily
WTI Crude Oil and Oil Service Stocks Trading Conclusion:
Looking forward 1-2 months (November – December) taking the seasonal price swings in oil, re-election cycle seasonality and price action of oil stocks I feel oil will trade sideways or down from here. With that life said, expect crude oil to rally during the last week of the year. I hope this provides some useful info for your trading!
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Chris Vermeulen is Founder of the well loved trading analysis website www.TheGoldAndOilGuy.com. There he shares his highly successful, low-risk trade thoughts. Since 2001 Chris has been a leader in teaching others to skillfully trade Currencies, Have a supply of Indices, Bonds, Metals, Energies, Commodities, and Exchange Traded Funds. Reach Chris at: Chris[at]TheTechnicalTraders.com
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Tags: Oil ETF, Oil Trading, Trade Crude Oil, WTI Crude Oil
Posted in How to Trade Oil, Oil Analysis, Oil ETF Analysis, Oil Price Chart | Comments Off
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