Black Gold, Texas Tea

• Posted by Greg Harmon
• on August 15th, 2012

The first thing I think of when I hear West Texas Intermediate Crude (WTIC) Oil, $CL_F, is ‘The Ballad of Jed Clampett’. From the days when big oil was just getting big and rigs were everywhere. Looking at the charts for Crude oil shows a very bullish outlook. Maybe the heyday of the Beverly Hillbillies will return. Take a look. The daily chart alone has several bullish features. There is the rising channel since the late June low, the Relative Strength Index (RSI) holding in

WTIC, $CL_F, Daily

bullish territory after only pulling back to the mid line, the positive Moving Average Convergence Divergence indicator (MACD), and the Median Line of the Andrew’s Pitchfork attracting the price higher. If it breaks the current bull flag higher then the next target is 97 and then 100. But the weekly chart shows that it may need a catalyst. The MACD trending higher and crossed to positive and rising price trend add to the bullish picture, but the RSI stalling at the mid line is a

WTIC, $CL_F, Weekly

little troubling. This level should not be too surprising though as the 20, 50 and 100 week Simple Moving Averages (SMA) are all bunched here. A move over them seems to be a lock to reach 104. The monthly view is biased to the upside as well but with a bit of caution. The price had rejected at the Hagopian Trigger line in May but held at the previous support and is running

WTIC, $CL_F, Monthly

higher again. The RSI never moved into bearish territory and the MACD has now stalled and ready to reverse. With price being attracted to the Median Line of the bullish (green) Pitchfork, a move over that Hagopian line this time will trigger a big target. Why, even the 3-box reversal Point and Figure chart has a bullish price objective of 109. Time again for the days of Black Gold and Texas Tea.

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