Thursday, April 16, 2015

West Texas Crude (WTIC) Rising Within Steep Wedge - Breaking Short-Term Resistance Lines

As the daily closing price chart (as of 4/15/2015) below shows, WTIC has been rising within a steep wedge (red and green dotted lines) and breaking apparent short-term resistance lines, some of which have been successfully tested as support lines (solid green), and one of which has not (dashed/dotted green line).

Yesterday's (4/15) price was at or near wedge resistance. A short-term correction down to the last breakout, which has not been tested yet as support, may occur - this level is also at/near wedge support.  

Click Chart to Enlarge

In our view based on these charts, the rate of rise within the wedge appears unsustainable in the longer-term.  So we are looking for WTIC to settle within a more sustainable pattern. 

The following daily closing price chart shows a longer-term perspective with apparent/potential support lines.

Click Chart to Enlarge

Although there is obviously no guarantee of this, in our opinion based on these charts, WTIC could again visit the $52.50 to $53.00 price range to test support based on our technical analysis of these charts, before settling into a more sustainable longer-term, trading range

Also, in our view, provided these support lines continue to hold, crude oil's recent price action may continue to help alleviate some fears associated with holding high yield debt issued by some energy companies strained by steep oil price declines within the last year.  However, we offer no guarantee of this and will make future decisions on whether to hold or sell corporate high yield bond funds based on the technical analysis of corporate high yield bond fund charts alone. 

Not Investment Advice | Important Disclaimer: 
The content in this article, including the identification and discussion of any specific security (e.g., bond fund), is NOT meant to be and should NOT be construed and/or used as investment advice. This article is for general information and educational purposes only. Please read the Disclaimers  for in their entirety. The U.S. Securities and Exchange Commission website has guidance on selecting an investment adviser.

Financial Disclosure:
The author/publisher has no position in oil at the time this article was written.

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