I thought I would post a few charts this morning to support my thinking that oil is bottoming. I'm looking for a retest of highs for oil into mid-winter (low 70s)?. I'm not entirely sure what NG is up to. The monthly chart is the only question mark. If I'm wrong, then oil corrects further to the mid-low 50s.
Oil is sitting on what should be major support. But the technical indicators are not signalling a buy yet. We only have what looks like positive divergence with price ie. indicators are firming up while price continues to drop. This indicates the downtrend is weakening and should be near an end.
On a weekly, you can see where support should lie. I'm looking for at least a bounce into mid-winter, but then we may just consolidate from there. Hard to say. If you are convinced of +$100 oil, then you have to start looking at buying around here.
More charts with some longer views.
The monthly chart suggests consolidation into next year or lower proces before a final bottom for oil.
And a reminder here on Frank Barbera's take (a very good TA guy IMO).
http://www.financial.../2006/1012.html
I assume some kind of reaction is coming post US Elections.
cheers,
john
