The proponents of Technical analysis often say that ”History repeats itself” and Crude Oil is offering an explanatory picture of what that actually means!We spot an Interesting formation in Crude Oil weekly chart repeating same historical price action that took place from 2009 – 2011. The current behavior seems to replicate the previous context in a similar way. The conditions and Seasonal factors surrounding both scenarios are pretty much parallel. It is also known as Fractals
Fractal Price action Scenarios in Crude Oil
This Historical Price action scenario in Crude oil is analogous to a map which offers some insight over present Market structure. It might be a surprise for aspiring traders, But experienced Price action trading professionals come across Self replicating structures like these all the time! By dedicating some time and effort in observing naked charts, we can spot similar formations. I even cover how to trade these fractals in my training program.
Price action Similarities of 2009 – 2011 and Current Scenario
Decreased demand and financial crises pushed Oil prices to new low (34$ per barrel) in 2009, in 2016 the cause is supply glut and output (25$ per barrel).
In 2010, prices formed a reversal formation that failed. In 2017, we are witnessing the same behavior.
In the middle Of 2010, market behavior resulted in BOF pattern which finally triggered prices upside. But we haven’t seen that in the current context!
So does it means Oil prices will shoot up from here, just like in the past? Well predicting markets are hard and I don’t believe that things turn out exactly like the past! Still Prices might move in the opposite side or things can go wrong fundamentally. Statistically speaking, this is still one of the many probable outcomes and not a certain one!
Despite all these but and ifs, it’s good to see historical scenarios matching with each other. It will be further interesting to watch Price action development from here in comparison to the past.
