USOil: forming an ascending triangle or a rectangle channel?
Is current USOil price action forming an ascending triangle or a rectangle channel? I think that the price action over next several weeks will provide an answer. On the daily chart, price has moved back to a 50% retrace of a rectangle channel but it has also recently bounced off of a potential trend line forming the bottom of an ascending triangle. The one nuance to this trend line is that the low overran it slightly. Several keys to watch on daily is the Stoch to see if it moves into the 40-60 range along with TSI moving up to 0 or maybe higher but does not drive higher. During the next several weeks, Price will consolidate in the black rectangle and ADX may move to a consolidation phase. Ideally, the ADX drops to 20 and moves below allowing price to consolidate and provides a well defined area for a breakout (up or down to occur).
On the weekly chart, an inverted hammer formed last week as it did the middle of last December. Using this as a pattern, I'm looking for this week to remain green while the next several weeks to turn red. Should the rectangle channel play out, the down move will take price to 39.2x range before another run up to 52. If the ascending triangle is in play, then price will move up to 52 after potential consolidation.
Another item of interest is that the first leg down in this pattern took 9 weeks while the second leg took 11 weeks. Currently, the leg we're in has only been in play for 4 weeks so if the ascending pattern is primary, the legs are not getting shorter.
On the weekly chart, an inverted hammer formed last week as it did the middle of last December. Using this as a pattern, I'm looking for this week to remain green while the next several weeks to turn red. Should the rectangle channel play out, the down move will take price to 39.2x range before another run up to 52. If the ascending triangle is in play, then price will move up to 52 after potential consolidation.
Another item of interest is that the first leg down in this pattern took 9 weeks while the second leg took 11 weeks. Currently, the leg we're in has only been in play for 4 weeks so if the ascending pattern is primary, the legs are not getting shorter.