Finweek English Edition - - Creating wealth -

Trend: Up, but over­bought in the short term. Strat­egy: Buy on a pull­back to­wards US$63,50. Brent crude broke out of a large fall­ing wedge (lines 1 and 2) in Fe­bru­ary. It’s been mov­ing up steadily. Re­cently it also broke out above line 3 to con­firm an in­verse head and shoul­ders pat­tern (as la­belled). That’s a bullish pat­tern. There are there­fore two bullish pat­terns now in place. How­ever, the daily RSI is in the over­bought re­gion, which im­plies a short-term pull­back to come. • Use a pull­back in price to­wards US$63,50 (spot price) to buy Brent crude (via the fu­tures mar­ket). Tar­get 1 is $68, which has just been reached, while tar­get 2 is at $76,40, which will re-test Brent’s all-time high from Au­gust 2006. Place your ini­tial stop-loss when buy­ing on a pull­back as a clos­ing price be­low $60 (spot price).

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