Oil and Gas Exploration Companies Move from Channel Bottom

Weekly Chart

Long Term: As can be seen in the chart above, the index has been in an uptrend after bottoming at a low of 13,134 in June 2017. The index made a high of 18,104 in April 2018 and closed at 17,339 in its most recent session, the fourth consecutive weekly session in the green so far. Index value has been in an uptrend and moving in a channel line, having found support and resistance at the channel extremes multiple times. Support at the channel extreme was seen in June 2017, July 2017, October 2017, and most recently in May 2017, while resistance at the channel extreme was seen in August 2017, November 2017, and January 2018. Outlook looks positive considering index value is closer to the bottom extreme of the channel.

Daily Chart

Intermediate Term: Channel line exists on the daily chart as well. Resistance based off previous support and resistance levels can be seen at the 17,600 level (middle yellow line), which has been tested in May 2017, January 2018 and May 2018. A penetration beyond this level could see resistance in between the psychological level of 18,000 and the April 2018 high of 18,100 (top yellow line). Support is likely to be found at the psychological level of 17,000 followed by support at 16,500 level (bottom yellow line) that coincides with the May 2018 bottom as well as the support level that lasted an entire month from Mid-Feb to Mid March 2018.

Short Term: Outlook for the sector looks positive at the moment. During yesterday’s session, index value penetrated the 50-day Moving Average line while that move was sustained in the most recent session, that is, even though the index closed in the red in its most recent session, it closed above the 50-day MA line. The upward pointing arrow on the price chart denotes the point in time when the MACD (12,26,9 period), RSI (9 period) and Momentum indicator (12 period) signaled a positive move for the index on the same day. On May 31st 2018, an MACD crossover took place above the signal line. This indication to the upside was confirmed by a penetration above the zero line on the Momentum indicator, denoted by the vertical pink line, as well as a penetration of the RSI resistance line on the RSI oscillator. A moving average crossover of the 10-day MA line above the 20-day MA line took place on June 6th 2018. In the most recent session on June 12th 2018, momentum line marginally declined to 297 after having found support near the zero line during the previous sessions. RSI line also found support close to the previous RSI resistance line during the latest session. Both the MACD and signal line have been advancing since the crossover supporting the positive outlook at least in the short term.

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Posted on: 2018-06-12T16:43:00+05:00