Brent Oil is now approaching an intermediate top. It could potentially make it up above USD 60 per barrel over the coming 2 weeks and then start to correct down into Q2 2017.
At FinGraphs, we present all charts over 3 investment horizons using 3 indicators for each one of these investment horizons:
Potential Trend: shown by the ‘Bull’ or ‘Bear’ figurines on the upper left side of the chart.
Possible Targets & Timing: targets are shown by the Green, Red or Grey price projection beams. These possible Targets Zones define the potential left in terms of Price objectives and Timing (when the Ellipse at the end of the beam has entered entirely in the chart, potential timing to the objectives has been reached).
Risk assessment: defined by the blue oscillator, the ‘Risk Index’, fluctuating from Overbought to Oversold. When it enters these exaggeration zones and leaves them again, a potential top or bottom is confirmed.
1. ‘Weekly’ Left-hand chart, which is updated every week and gives the market perspective over the next few quarters:
Since its bottom early Q1 2016, Brent Oil has been in a corrective uptrend ( Potential Trend ) with possible targets between USD 53,8 and USD 68.6 per barrel (Possible Corrective Targets Up in ‘grey’ ). The lower end of these possible price objectives has been reached and the potential in terms of Timing (Possible Timing, i.e. “ the grey Ellipse”) is almost finished. This suggests an imminent end to this corrective move up and would suggest that a period of retracement to the downside could start soon.
2. ‘Daily’ Middle chart, which is updated every day and gives the market perspective over the next few months:
Potentially, the “Bull” uptrend is still in place ( Potential Trend ) and still has some upside potential left, i.e. the lower end of its possible Impulsive Targets up are at USD 59.50 per barrel, the higher end, which extends out of the chart at almost USD 65 a barrel ( Possible Impulsive Targets Up in ‘green’ ). Yet, the Risk Index had reached the Overbought zone, which usually indicates that a move is nearing exhaustion ( Risk assessment ) and more recently has started to move lower below this Overbought Zone. This usually confirms that a potential top is near (A potential reversal down is usually confirmed only once the Risk Index leaves the Overbought Zone again). Finally, the possible Timing of this impulsion is also nearing completion as its timing Ellipse as entered the chart. We expect another couple of weeks to go as prices move into their impulsive targets up. ( Possible Timing, i.e. “the green Ellipse” ).
3. ‘Hourly’ Right-hand chart, which is updated 8 times a day and gives the market perspective over the next few weeks:
Following a flat consolidation since early January, the Hourly chart is back in a potential ‘Bull’ Trend ( Potential Trend ). The Risk Index is in the middle of its range, showing no signs of exaggerations. Possible Price Targets are eying possible price objectives up to a zone between USD 57 per barrel and USD 59 per barrel (calculated as the projection extends out of the chart). Finally, the potential timing to the objectives has still about a week or so to go. As per the Daily chart, we believe it can potentially accelerate up towards a top around USD 59 a barrel at the end of the month.
Longer term, Brent has been correcting up since early 2016, it has now reached the lower end of its possible corrective target zone up and should soon start retracing down
Medium term, Brent has been in an impulsive uptrend, which still has a bit of potential (USD 59 to lower 65 a barrel), yet a top may materialize towards the end of the month.