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ENERGY and EQUITIES

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WTI CRUDE OIL and BRENT CRUDE OIL prices are developing bullish chart patterns. Year-long inverse H&S chart patterns are close to completion. Both WTI Crude and Brent Crude are challenging their necklines. For Brent Crude oil the year-long horizontal resistance stands at $52 levels. For WTI, the neckline stands at $50 levels. Breakout above the strong resistances can push prices towards $70 levels in the following months. $70 is the possible H&S bottom price target.

WTI CRUDE OIL weekly scale price chart

WTI CRUDE OIL weekly scale price chart

BRENT CRUDE OIL weekly scale price chart

BRENT CRUDE OIL weekly scale price chart

Similar bullish technical outlook can be identified on several equities in the energy sector and energy related exchange traded funds. Below are some of the equities from Tech Charts watchlist. Note: According to Edwards & Magee a breakout is confirmed when a stock records a daily close above the resistance by 3% margin. Levels on the charts below take this guideline into consideration.

OMV AG an Austria based integrated oil and gas company forms a year-long symmetrical triangle. Stock has been challenging the upper boundary of its consolidation. Breakout above 26.5 levels should generate fresh chart pattern breakout signal.

omv-ag

CHINA OIL & GAS Group limited is a Hong Kong based investment holding company principally engaged in natural gas and energy-related businesses. A decisive close above 0.65 will confirm breakout from year-long H&S chart pattern.

china-oil-gas

PREMIER OIL is an independent exploration and production company with oil and gas interests in the North Sea, South East Asia, Pakistan, the Falkland Islands and Latin America. The company is engaged in the business of upstream oil and gas exploration and production. Since the beginning of May 2016 the stock has been forming a rectangle (continuation) chart pattern with the boundaries between 59.75 and 80.35. A decisive close above 82.40 will confirm breakout from the 6 month-long rectangle chart pattern.

premier-oil

CANYON SERVICES GROUP provides stimulation and fluid management services to oil and gas exploration and production companies operating in the Western Canadian Sedimentary Basin. The company’s segments include Pressure Pumping Services and Fluid Management Services. Price chart of the, Toronto Stock Exchange listed Canyon Services has a text-book H&S bottom chart pattern. Year-long base formation has a horizontal resistance (neckline) at 5.87 levels. A decisive close above 6.05 will confirm breakout from the year-long H&S bottom.

canyon-services

HALLIBURTON COMPANY is a provider of services and products to the upstream oil and natural gas industry. Price chart of the U.S. energy stock formed an inverted triangle with the horizontal boundary standing at 46.85 levels. Over the past 4 months, the resistance was tested 3 times. Breakout above 48.30 levels will complete the multi month consolidation.

halliburton

LAREDO PETROLEUM is an independent energy company focused on the acquisition, exploration and development of oil and natural gas properties, and the transportation of oil and natural gas from such properties primarily in the Permian Basin in West Texas. Price chart of Laredo Petroleum is forming a year-long H&S bottom with the neckline standing at 13.70 levels. A decisive close above 14.15 levels will confirm breakout from the bullish base formation.

laredo-petr

HELIX ENERGY is an international offshore energy services company. The company provides services to the offshore energy industry with a focus on well intervention and robotics operations. Price chart of HELIX ENERGY formed a 5 month-long symmetrical triangle. Breakout is underway with the strong weekly close of last week’s price action.

helix-energy

GEOSPACE TECHNOLOGIES CORP designs and manufactures instruments and equipment used in the oil and gas industry to acquire seismic data in order to locate, characterize and monitor hydrocarbon producing reservoirs. GEOSPACE TECHNOLOGIES formed a year-long H&S bottom with the neckline standing at 19 levels. A decisive close above 20 levels will confirm breakout from the multi-month bullish chart pattern.

geospace-techn

ISHARE GLOBAL ENERGY ETF is an exchange traded fund listed in the NYSE. The price chart of the energy ETF has a similar year-long H&S bottom with the neckline standing at 33.15 levels. A decisive close above 34.10 will confirm breakout from the multi-month base formation. The right shoulder of the H&S bottom can be identified as a rectangle with the boundaries standing at 30.50 and 33.15.

ishares-glob-energy

WTI CRUDE OIL

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Oil prices are rebounding but strong resistance area remains between $32 and $40. In 2009, when oil price dipped below $40 support area, it took two months to recover back above critical level and there hasn’t been a single month of close below $40. Latest breakdown below $40 has been decisive and unless we see a rally above $40 in the last trading day of the month, this will be the second monthly close below $40.

It is highly likely that the new equilibrium will form between $10 and $40. Recovery above $40 can take longer. Possibly there  will be a lengthy consolidation and the upper boundary of that consolidation remains at $40.

Both charts are plotted on monthly scale. Each bar represents one month of price action.

WTI CRUDE OIL

WTI CRUDE OIL II

MSCI ALL COUNTRIES WORLD INDEX

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This update will cover several markets. There has been significant developments in the first half of January. I’ve given the title MSCI ALL COUNTRIES WORLD INDEX because I think it is one of the most important chart in this update. However, developments in Copper, Palladium and Emerging Markets index are also exciting. Over the past few weeks I’ve updated Tech Charts twitter followers on Copper, Palladium, Light Crude Oil, MSCI Emerging Markets index and some other chart patterns on equities. This will be an update for all followers.

MSCI ALL COUNTRIES WORLD INDEX

MSCI ALL COUNTRIES WORLD INDEX is at a critical juncture. Index covers more than 9000 securities in 46 different Developed and Emerging markets. I find it as a good representation of the global equity market performance. Attached is a monthly scale chart. MACD, which is a momentum and a trend following indicator generated a sell signal in November 2014. Cross-over on MACD is usually the first warning signal for a possible trend reversal. 2-year moving average which acted as a good trend following tool over the past decades is now at 395 levels. Breakdown below 392 (previous low in October 2014) will confirm the medium/long-term correction in global equities. We need to be prepared. This chart is at the top of my watch list.

COPPER

Dr. Copper warned us and I’ve sent several updates on this chart development. Weakness in Copper prices is negative for the global growth. Chart pattern (descending triangle) suggested lower prices below 3 levels. Breakdown was followed by an acceleration on the downside. Descending triangle price target is between 2.10-2.25. 2.10-2.25 area is also the lower boundary of the trend channel. Weakness can continue.

MSCI EMERGING MARKETS INDEX

I study volatility on daily, weekly and monthly scale. A chart with low volatility on weekly and monthly scale is important for me. The longer the low volatility period, the better it is. Because that means there is a lot of energy built in that low volatile consolidation range and a a breakout is usually followed by a strong directional movement. This is the case for the MSCI Emerging Markets Index. Volatility reached multi-decade low levels on the monthly scale chart. A decisive monthly scale breakdown below 900 levels will push emerging markets to lower levels. This is a developing story and should also be watched closely.

LIGHT CRUDE OIL

Mainstream media is talking about $40 oil price. Here is where that level is coming from. $40 is a long-term support/resistance level for the WTI Light Crude Oil. The important question is will it find support at that level? Well, for me the long-term chart is the best available information. In the past buyers/sellers appeared around $35-$40 area. I’ll expect the same. If we see a rebound, the next thing I will check will be how strong the rebound is. A weak rebound that hardly pushes the prices above $50 will signal further weakness for energy prices in the long-term.

PALLADIUM

Last but not least, Palladium. I think the last 2 year’s uptrend has been extremely weak. Price tried to reach 2011 high level and it took 2 years for Palladium to reach that level with a major negative divergence on RSI on the monthly scale chart. October low stands at 725 levels. Breakdown below this level will send prices lower, possibly towards 500 levels.