Crude Oil - 'Next is What?'

The NIFTY moved as expected and indicated. It closed down 112 points to close at 4320. I expect the Gap created on the 'Vote of confidence' day will soon get filled.

In the meanwhile, CRUDE OIL seems to be completing it's correction (oh no !!).

After reaching my target of Rs 5200/- yesterday, it bounced back to close at Rs 5307 thereby creating , what is known as a 'hammer' pattern in Japanese Candlestick terminology.



This bounce back should sooner or later give a move of another Rs 300/- in the short term i.e. to a price near Rs 5600/-.

Also If you observe the RSI which was in a negative divergence has now reached oversold region - a characteristic which I have explained in my book. The the possibility of a rebound to Rs 5600 is more likely.

Consider Rs 5200 as the crucial support for any long trade and only if that is broken expect further weakness.

Presume the week was quite profitable for all the bulls out there !!!!!

Happy trading

CA Rajiv D Khatlawala