Brent crude (QA) looks to be in the process of rolling out of its major (long-term) 3-wave downtrend. Monthly stochastics established a bullish crossover below the oversold level of 20% at the end of April, a signal the major trend could soon turn up. If so, a bullish reversal pattern could come in the form of a 2-month at the end of May or new 4-month high beyond $89.10. Theoretical Positions: Short from the June close of $114.81 possibly. If not, shorts could’ve been established at the July close of $103.97 after the spot-month contract posted a new 4-month low below $96.95. These short positions may have been lifted with the December move below the target price of $76.50. If not, they could’ve been lifted during the March selloff. If still holding short positions, stops would be above the previous 4-month high of $89.10 with new longs established at the same time.
WTI crude oil (CL) looks to have rolled to a new major (long-term) 5-wave uptrend. The spot-month contract took out its previous 4-month high of $83.34 during April before monthly stochastics established a bullish crossover below the oversold level of 20% at the end of the month. The market has generally held support at $74.28, the 50% retracement level of the previous uptrend. Given fundamentals remain bullish, the 50% level was expected to hold. The initial upside target is $89.48.nTheoretical Positions: Previous short positions have been covered and new longs were established at the new 4-month high of $83.35. Sell stops would be placed below the March low of $64.12.
Distillates (HO, heating oil, diesel fuel, jet fuel, etc.) extended its major 3-wave downtrend to a low of $2.3320 during April, a test of the target price of $2.3531, the 61.8% retracement level of the previous uptrend. Monthly stochastics remain well below the oversold level of 20% and in position for a possible bullish crossover. Theoretical Positions: None at this time.
RBOB gasoline (RB) remains in a major 5-wave uptrend. The spot-month contract posted a high of $2.8943 during April, a test of the target price of $2.9011 discussed at the end of March. The spot-month market could now post a contra-seasonal selloff that would be viewed as Wave 2 of the 5-wave pattern. Theoretical Positions: New longs could’ve been established near the December 2022 close of $2.4783, with sell stops below the December low of $2.0204.
Natural gas (NG) extended its major 3-wave downtrend to a low of $1.946 during April. Monthly stochastics are well below the oversold level of 20%, possibly limiting downside potential. Theoretical Positions: None at this time.