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Keep in mind that as expiration for the June contract approaches in the third week of May, a lot of traders are going to be remembering what happened to the May contract. Might want to keep that in mind here and steer clear of it, but watch for buy ops then. IMO
This situation with oil isn't going to be a quick fix, but as production is shut down and companies go into bankruptcy, there will be a point where the glut gets used up and demand will rise... and there is likely not going to be the production to keep up with it. The trick here is to get in at that sweet spot when the glut is about gone and demand just starts its uptick... and keep in mind that Wall St tends to be ahead of the curve.
I might even look to buy a few futures contracts a year or two out from when the uptick starts. The options players here ought to make some nice money here when it happens as well.
My pleasure LD.
Along with the link I provided in my prior post, you can also refer to this page if you want to understand any formations/patterns I discuss:
https://school.stockcharts.com/doku.php?id=chart_analysis:chart_patterns
There's a search window you can copy and paste any terminology I use that should aide in your understanding if I don't do a good enough job explaining myself.
Please understand I know absolutely nothing about the fundamentals of GE at this time. I do know that it's one of the oldest and largest (or at least it used to be) companies in the US, so as long as the company is financially solid there's probably not a lot of reason for a buyer down here to be nervous. Just requires some patience.
In case you are interested in understanding the jibberjabber I posted here... https://school.stockcharts.com/doku.php?id=technical_indicators:relative_strength_index_rsi
That site has a chart school section that does a good job explaining pretty much anything technical analysis related.
Hi Luckydude777. The first thing that comes into my head after reading your post is that, considering the economic climate we're in, I know I wouldn't buy a stock that has dropped as much as GE has going into earnings, but aside from that there is only one positive thing I see on the monthly chart which is bullish divergence of the RSI(14) study. Here's what that means:
GE hit a low of 6.40 in December of 2018. The RSI went really low then to around 13.00 (this is SUPER LOW, especially on the monthly interval chart). On March 20 this year GE hit a new price low of 5.90, but the RSI on the monthly chart didn't go even below 30.00. So this is the divergence... when price hits a lower low than a previous low, but the RSI study does not hit a new low. This kind of divergence is often one of the earliest signs of a price reversal. The same kind of thing can happen at highs to give you a heads up to take some profits or get out of a stock.
Now the downside of this divergence is that it doesn't mean that GE won't go lower in the near term. You have to look for other signs of a bottom to give you a better sense of when the bottom might be in. Right now on the daily and weekly intervals for GE the formation looks like a bearish pennant, but on the daily interval it could be a double bottom or a cup & handle bottom formation, which actually looks more like a handle & cup which can happen on rare occasions. So far it's too soon to tell.
If I had just bought in to GE, I would be watching the 6.20 level for support and use that or maybe a few cents lower for a stop loss. If it does lose that level on Monday you're likely going to see a low of about 5.78, give or a take a few cents. If it blows through 5.78 on Monday then you need to watch the volume and see if any buyers come in, because it's either going to mean even lower prices in the coming days, or if volume is really high and strong buying comes along near the end of the day perhaps that could be the impulse move you want to see that often indicates a bottom or close to it.
I'll keep GE on my watch list and update as I see anything interesting on it.
Well the crude contract is currently up 2% while UCO is down 6.5%, so right now it's hard to think that would happen. A lot of these ETF's have gone goofy so I'm not touching them.
I can't honestly say I fully understand this, but I think at least part of your answer lies in this article: https://www.zerohedge.com/markets/mechanisms-etf-market-and-how-they-could-break
Good article for oil longs. https://www.zerohedge.com/energy/can-oil-prices-get-back-100
Understood. I'll make sure that I clarify when I post. I doubt you're too low IQ though. I'm not at all an intellectual type. Just takes a little time to understand is all.
Take care.
Everyone has to do what is comfortable for them my friend. I assume based upon the price movement that you made money? If so, congrats! After 20 years of trading many different things, I found that each symbol has its own personality in the way that it moves. Oil is one of the most unkind personalities I've traded, but for some reason I enjoyed it the most so stuck with it for over a decade. I've had several fights and left it a few times, but always come back to it! lol
If you should ever be interested in a chart interpretation for whatever you're trading, send me a mssg here and I'm happy to offer what I can as long as I have time. Good fortunes to you!
Referencing the futures contract again, the pullback to 15.78 from the 18.26 high was a 50% retracement of the overnight low of 13.35, which also is where the 20EMA on the hourly chart is, offering extra support. In the last 3 minutes of futures trading there was quite a battle between bears and bulls and the bulls definitely won. The charts are looking good for the run to $20. Just my opinion. Please make your own trading decisions.
In retrospect, it appears the EIA report yesterday was used to help form a bull flag, which then broke back into the continuation of the Adam & Eve breakout on the futures contract and now we're experiencing the grinding move higher that my charts are showing will likely go to around 20.20. We'll see how it goes. Hope everyone is making nice bank! :)
In your opinion.
I think it is unwise to ask people you don't know what they think will happen to your money.
Take a look at the UCO board and my chart posts this morning regarding the Adam & Eve bottom formation on the oil futures hourly chart. Here's an update to that now that oil inventory numbers have been posted...
This is an updated hourly chart, although with a 15 min lag. There is a nice flag forming now with the 20 ema as support. Likely to get a breakout, maybe before 2:30 today, but sometime by tomorrow. That 20.30 target by the end of the week is still on imo.
Inventories are almost 4M barrels lower than last week. The futures might get that move back to $20 yet.
I've only got 3 more posts today so going to take a break for a while.
Short term overbought...needs a pullback. Lots of retail traders got a quick $5 run so I'd expect profit taking. $14 needs to hold support imo.
The oil inventory report comes out at 10:30 EST. That may put the kabosh on any upward movement.
This climb the oil futures is making could take it back to 20 in short order. I have a few posts up on the UCO board about the formation when I saw it at about 7:30. So far it's playing out nicely. Never know if it will do exactly what I think, but so far so good.
I think it's just moving up because oil is making a big move.
USCF Announces One-for-Eight Reverse Share Split for the United States Oil Fund (NYSE Arca: USO)
Published: April 22, 2020 at 8:45 a.m. ET
Update: The nature of this breakout will prove to be one of two things...probably. It is either going to be a grinding move higher that typically drives traders crazy due to it's slow, churning nature. OR, this is going to be a false breakout type of "bull trap". Regardless, on any pullback the $14 level on the futures needs to hold as support for me to feel confident that the move to the target price of 20.30 on this adam & eve formation will eventually occur.
Now that I know how to post charts I'll update as warranted/as I can.
Since I posted about the chart formation in oil two hours ago I have to make an important edit since what I was seeing is so far playing out. I stated that the breakout from 14.19 would be a strong impulse move that would take oil to 20.30 within a couple hours. I should have said a couple hours to a couple days. It could take longer, but probably not if the breakout does occur.
I'm currently using Interactive Brokers platform, which sucks but is good enough for what I'm doing now.
I'm going to try to post a chart I made to show the Adam & Eve formation on the oil futures hourly chart. See if it works...
Ok it worked. The first, lower horizontal line I drew is the 14.19 level where the breakout would occur from. The second higher horizontal line is around the 20.30 target price.
Oil futures price now to 13.58. Looks like the formation has a good chance of working now. Watch for a move to around 14.19 and then probably some consolidation to occur. It could just launch from there or it could consolidate for a while, maybe making another "handle" type formation before the breakout. Never know exactly how the breakout will occur.
On the oil futures hourly interval chart there is a potential formation in the works that, if it plays out, will quickly see the oil contract back to about 20.30. Since I haven't yet figured out how to post my charts on here, I'll describe the formation and what to look for...
It's called an "adam & eve bottom formation". It is basically the same as a cup & handle bottom formation except that the "cup" portion of the formation looks more like a "V" than a "U". The "V" is the "adam" part of the formation. The "eve" part looks like the handle of a cup & handle, and that part is potentially in the works right now.
So if the formation plays out there would have to be a move back up to 14.19, and it would need to happen today, soon. If that doesn't occur then the formation is void and we move on and forget about it. If it moves to 14.19 then we're looking for a breakout, a strong impulse move that would launch us back to the 20.30 target probably within a couple hours. There would have to be some strong news to drive this I would think, but who knows.
At this moment, the eve portion of the formation is looking more like a bear flag forming under the 20 ema of the hourly chart, so it's already not looking great, but they don't have to be pretty to work.
On the oil futures hourly interval chart there is a potential formation in the works that, if it plays out, will quickly see the oil contract back to about 20.30. Since I haven't yet figured out how to post my charts on here, I'll describe the formation and what to look for...
It's called an "adam & eve bottom formation". It is basically the same as a cup & handle bottom formation except that the "cup" portion of the formation looks more like a "V" than a "U". The "V" is the "adam" part of the formation. The "eve" part looks like the handle of a cup & handle, and that part is potentially in the works right now.
So if the formation plays out there would have to be a move back up to 14.19, and it would need to happen today, soon. If that doesn't occur then the formation is void and we move on and forget about it. If it moves to 14.19 then we're looking for a breakout, a strong impulse move that would launch us back to the 20.30 target probably within a couple hours. There would have to be some strong news to drive this I would think, but who knows.
At this moment, the eve portion of the formation is looking more like a bear flag forming under the 20 ema of the hourly chart, so it's already not looking great, but they don't have to be pretty to work.
Thanks. I was meaning my own charts. I think there's a board for that. I'll look later. Have to take off for a while.
My pleasure.
It hit 6.50 ten minutes ago.
I need to figure out how to post charts and images on this thing.
Whenever you are interested in an ETF, make sure you read the prospectus and do some research on them before you get into them. They are more complicated than a stock that you can just buy and hold.
Happy to help. I give you credit for not being one of the many ignorant souls who jump into things and are losing their asses. Lot of that going on lately.
Just watched the futures do an $11 > $6.90 dump in 5 mins. I traded oil futures for 15 years. Never seen anything like this.
I know ERX already did a 10:1 RS a few weeks ago. This one isn't in the same category, but XOP is oil & gas exploration & production and it's been holding up very well through all of this. I own a couple hundred shares in an investment account and am looking to add but I'm holding off from doing anything until more clarity comes into the market. My last trade was UCO yesterday morning. Now I want to wait and see what happens. I don't think a lot of the problems are going to be resolved too quickly, so I'd rather be patient than jump in early and lose a piece of my arse. ;)
ERX is an ETF, not a company, and the chart looks the way it does because they recently did a 1:10 reverse split.
https://www.prnewswire.com/news-releases/direxion-announces-reverse-splits-of-three-etfs-301021066.html
JohnCM & Smilin.. in case you didn't see earlier, this is the poster formerly known as Richsooka. This is my old alias that I was just able to get back into.
That sucks
A couple of us did try to warn you. At least you had the balls to post your loss here. Most wouldn't.
The best is yet to come. It's always darkest before the dawn.