Candlesticks of this type with two long ‘tails’ that ultimately defeated bears are associated with turning points.
Note that the last time WTI bottomed back in late 2008, the candlesticks were somewhat similar.
Taking a level out of the last bottom, the next possible resistance is 39.03.
BUT before you go all in, do note how it is different this time. Everything looks good from the candlesticks, price point of view until you overlay Dow Jones Industrial Average (and the Fed’s rhetoric) into the picture.
The previous time WTI was this low, stocks were equally cheap but this time there is a huge divergence.
Late November 2008 the Federal Reserve started QE 1 whereas it is supposed to hike rates this time.
WTI monthly chart 2008 – present overlaid with Dow Industrial
Soh Tiong Hum is Director of TerraSeeds Market Technician Pte Ltd. TerraSeeds is a trading educator in Singapore since 2005.
Soh Tiong Hum is a member and regular speaker at Technical Analysts Society Singapore events and has a bi-monthly lunch time event at IG Singapore on forex and stock markets. He is an avid blogger on technical analysis topics; his Twitter account @sohtionghum was ranked #23 out of The Top 70 Twitter Accounts To Follow In 2015 by MahiFX.
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