06.10.2011 - OIL, opportunities

Hello everyone,

today we're having a look at the DAX and OIL. 

DAX

Price-trends on DAX stand out more than those on other European indexes like e.g. Euro-Stoxx 50. One can clearly make out a bearish flag pattern. Most of the time price drops out of this pattern by reaching its support line. This means in this case:

If price falls below 5.000 points we will see a sell-off to 4.800 points at least. 

If price falls to 5.000 points and passes the test, we will see a rise back ideally 5.800 points.

OIL

The oil-price has been falling since April. Yet still the downtrend is intact, due to its periodicity, this market is perfect for swing traders ( = buying/selling near trend tops/bottoms). As the bottom graphic shows, the CCI perfectly matches with price lows even running fast most the time. That means, when CCI is red, a new low is either reached or reached within the next week.

Coming back to the present: we have seen the CCI go red some days ago, and even if price has not reached the April downtrend-line exactly, we strongly suppose that the low has been reached and a upward movement is now intact.

Setting the stop-loss to below 100 points we go long on oil-price. 

Target is set to 112 points within the next month.

Even without leverage this holds the opportunity to gain 12% in a month on minimum risk.