Trump: Oil is Ready for a Yuge Move Higher

• Posted by Greg Harmon
• on January 29th, 2016

Donald Trump is having an excellent campaign season for sure. There are times when he may stretch the truth a bit, or interpret facts a bit differently than others would, but it is working for him. in the statement above though it seems like he may be on to something.

The chart below shows Crude Oil prices on a monthly basis for the past 20 years. I have noted the patterns shown before but focus on just XXX things now. First with one day left to trade in January the price is about to print a Hammer candle. These are often reversal candles, but needs confirmation to trade off of the signal. This means February would need to close higher to signal a reversal.

The lower shadow of that Hammer also reaches down into the Potential Reversal Zone (PRZ) of the bullish Bat harmonic shown in the two yellow triangles. This combination of Fibonacci ratio retracements supports a reversal higher targeting 38.2% of the pattern as a first target. This would be a move to about $63.50. The second target on continued strength is a 61.8% retracement or to $95.50. Add to this picture that momentum is now oversold and there is a recipe for a reversal.

I have written several times over the past year, when I first drew up this chart, the reasons that Oil might find a bottom in the 25 to 32.5 range. What is significant now is that a close above the range tomorrow gives the first reason to now start looking for a reversal higher. That is Yuge.

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