Oil Price Note

Readers familiar with this blog know I refrained from a long position in the oil sector until we got
close to the traditional annual oil price bottom around the end of Feb. True to form this time out,
oil has been in rally mode since mid - Feb. The price has entered an intermediate term positive
reversal and has taken out nearly three month resistance of $35. There are nice up trends underway
in RSI and MACD and oil has taken out its 50 day  m/a without stress. The RSI measure is tilting
up to an overbought reading for the first time since last May. From a seasonal perspective, oil has a
decent shot at challenging its 200 day m/a over the next 30 days. WTIC Oil


The oil price tends to hit a plateau / corrective period from mid - Apr. through Jul. Aggressive players
often have to decide as spring takes hold whether to keep long positions through this corrective
period to capture more seasonal strength as the year wears on or take profits and wait for a decent
re-entry period as the summer progresses.

Note as well that when oil failed to take out its 200 day m/a last year it was a bad omen. So even
if oil progresses further, traders will need to pay full attention to whether oil is again rebuffed at
the '200'.