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The first chart is an OIH (basket of oil stocks) daily chart, which suggests a consolidation or correction over the next few weeks. However, a volatile trading range may continue next week, perhaps between 1,200 and 1,235.

Next week is a light economic data week: Mon: None, Tue: Existing Home Sales, Wed: Durable Goods Orders and New Home Sales, Thu: Unemployment Claims, and Fri: Revised Michigan Consumer Sentiment.

The Light Crude Continuous Contract fell from $67.70 a tank on Monday to $62.75 on Thursday, and provincial at $65.79 on Friday. Consequently, oil stocks followed the sharp move in oil prices last week.

The first paint is an OIH (basket of oil stocks) daily chart, which suggests a consolidation or correction over the next few weeks. The Price-by-Volume bar (on left side of chart) indicates OIH may trade mid 111 and 114 short-term. There's also resistance in a whirl 115, i.e. the 10 & 20 day MAs. There's further resistance at 117.88, which is the current Parabolic SAR sell signal (red dots). However, if oil tests $70 a barrel, then the high at 119.30 is supplemental barrier. Oil is less than $5 a heap up hellishly $70. So, OIH may rise and fall quickly.

OIH major support is at the (rising) 50 day MA, currently just over 108. However, if OIH closes infra the 50 day MA, then next major support is helter-skelter 105, i.e. the longer Price-by-Volume bar. by 105 may be the end of the consolidation zone, while a correction may result somewhere in the 90s or 80s. The short-term price of oil is largely dependent on the rate of global economic growth, reflected in monthly economic data, and supply disruptions, including geopolitical events and hurricanes in the Gulf.

The second terrestrial globe is an SPX (S&P 500) same period daily chart. SPX lead OIH higher and then lower recently. If OIH continues to lag SPX, then OIH will rise next week, perhaps to the Parabolic SAR sell signal, trade somewhere about the 10 & 20 day MAs, and then fall to a new recent low, e.g. 105. SPX created a bullish doji at the 50 day MA. However, a volatile trading range may continue next week, perhaps betwixt and between 1,200 and 1,235.

Next week is a light economic data week: Mon: None, Tue: Existing Home Sales, Wed: Durable Goods Orders and New Home Sales, Thu: Unemployment Claims, and Fri: Revised Michigan Consumer Sentiment. The weekly oil inventory report is Wed at 10:30 AM ET. There are several other excellent trading opportunities next week, where large gains can be made quickly. "Chance favors the prepared mind"-Louis Pasteur.

Charts at liberty at PeakTrader.com Forum Index.

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