Crude Oil (WTI)Commodities | Technical AnalysisTuesday, 8 March 2016

Did oil just stop slipping?

Crude oi l (WTI) has been moving in a long-term downtrend, reaching i ts lowest level las t February at 28.74.However, a gl impse of l ight a t the end of the tunnel i s s tarting to emerge, s igna l ing a near correctionupwards . Here are some facts to back that up.

Daily Chart

The da i ly chart s hows oi l moving in a downtrend, reaching 28.76 before rebounding towards 36.28. That topforced i t back down to form another bottom at 28.74, which i s approximately around the same level as the fi rs tbo om. It held ground there and rebounded to form a s ideways channel between approximately 28.70 and36.30. Breaking above the upper l ine of the a foremen oned channel wi l l indicate con nua on towards i tsprojected minimum target around res is tance zone 42.00-43.00.

Looking at the RSI a t the same move, we see a pos i ve divergence. As oi l formed i ts previous bo oms flataround the same levels (28.76 and 28.74), the RSI formed two success ive higher lows .

Subsequently, oi l closed a lmos t at the s ame level of i ts previous high, whi le the RSI jus t surpassed i tsprevious corresponding high in addi on to cross ing over i ts 50 l ine, which adds more weight to theprobabi l i ty of a close rebound.

Weekly Chart

The weekly chart shows the long-term downtrend, recording i ts lowest level a t 28.74 las t February. However,s igns of a poss ible correc on s tarted to materia l i ze when the RSI s tarted to divert by making higher lows ,whi le oi l kept heading north.

As shown above, the firs t bo om was around Q1 2015; the second was in Q3 2015; and the thi rd was the la tes tbottom recorded las t February. Al l the whi le, the RSI kept recording higher corresponding lows .

No ce a lso how the RSI rebounded off of i ts uptrend towards i ts previous high, indica ng a near rebound forthe oi l as wel l . But not to put the wagon before the horse and say the oi l i s targe ng i ts previous top,targeting i ts previous weekly bottom at 41.93 would suffi ce for now.

Conclusion

Crude oi l (WTI) i s set for a good correc on, breaking free from the price s ideways channel to the ups idetowards res is tance zone 42.00-43.00, backed up by pos i ve RSI divergence on both da i ly and weekly meframes .

Mona Hassan, CFTeSenior Technica l Ana lys tMubasher Internationa lMona.Hassan@Mubas herFS.com

Disclosure Appendix

Importa nt Disclosures Methodolog y The consensus ra ng s a nd ta rg et prices a re ba sed on the la s t three months . Ana lys tra ng s s ta s cs cha rt is ba s ed on recommenda ons ma de by third-pa rty a na lys ts during the la s t 12 months . We do nota a ch a consensus ra ng ( i.e . "na " or "not a pplica ble/a va ila ble" if 1) a consensus ta rg et price ha s not been upda ted overthe la s t three months or 2) the compa ny is not ra ted or covered by a ny third-pa rty a na lys t. O ther Disclos ures MFS does notha ve a ny proprieta ry holding in a ny securi es . O nly a s a nominee, MFS holds sha res on beha lf of its clients throug hO mnibus a ccounts . MFS is not currently a ma rket ma ker for a ny lis ted securities .

Analyst Certification

I (we) Mona Ha ssa n, Senior Technica l Ana lys t, employed with Muba sher Interna ona l, a compa ny under the Na ona lTechnolog y Group of Sa udi Ara bia be ing a sha reholder of Muba sher Fina ncia l Services BSC (c) a nd a uthor(s ) of this report,hereby cer fy tha t a ll the views expres sed in this resea rch report a ccura te ly reflect my (our) views a bout the subjectis suer(s ) or security( ies ) . I (we) a ls o cer fy tha t no pa rt of my (our) compensa on wa s , is or will be directly or indirectlyre la ted to the specific recommenda on(s ) or view(s ) expressed in this report. Also, I (we) cer fy tha t ne ither mys e lf(ourse lves ) nor a ny of my (our) clos e re la tives hold or tra de into the subject s ecurities .

Head of Research Certification

I, Amr Husse in Ela lfy, Globa l Hea d of Resea rch of Muba sher Fina ncia l Services BSC (c) confirm tha t I ha ve ve ed theinforma on, a nd a ll the views expressed by the Ana lys t in this resea rch report a bout the subject is suer(s ) or security( ies ) . Ia lso cer fy tha t the a uthor(s ) of this report, ha s (ha ve) not rece ived a ny compensa on directly re la ted to the contents ofthe Report.

Disclaimer

This document is not a nd s hould not be construed a s a n offer to se ll or the solicita on of a n offer to purcha se or s ubscribefor a ny investment. Muba sher Fina ncia l Services BSC (c) ( 'MFS') ha s ba sed this document on informa on obta ined froms ources it be lieves to be re lia ble but which it ha s not independently verified; MFS ma kes no g ua ra ntee, representa on orwa rra nty a nd a ccepts no respons ibility or lia bility a s to its a ccura cy or completeness . The opinions conta ined within thedocument a re ba sed upon publicly a va ila ble informa on a t the me of publica on a nd a re subject to cha ng e withoutno ce. This document is not intended for a ll recipients a nd ma y not be suita ble for a ll investors . Securi es described inthis document a re not a va ila ble for s a le in a ll jurisdic ons or to certa in ca teg ory of investors . The document is nots ubs tu on for independent judg ment by a ny recipient who should eva lua te investment risks . Addi ona lly, investorsmus t reg a rd this document a s providing s ta nd-a lone a na lys is a nd s hould not expect con nuing a na lys is or a ddi ona ldocuments re la ng to the is suers a nd/or securi es men oned here in. Pa s t performa nce is not necessa rily a g uide tofuture performa nce. Forwa rd-looking s ta tements a re not predic ons a nd ma y be subject to cha ng e without no ce. Theva lue of a ny investment or income ma y g o down a s well a s up a nd you ma y not g et ba ck the full a mount invested. Where a ninvestment is denomina ted in a currency other tha n the loca l currency of the recipient of the resea rch report, cha ng es inthe excha ng e ra tes ma y ha ve a n a dverse effect on the va lue, price or income of tha t investment. In ca se of investments forwhich there is no recog nized ma rket, it ma y be difficult for investors to se ll the ir investments or to obta in re lia bleinforma on a bout its va lue or the extent of the risk to which it is exposed. References to ra ng s /recommenda ons a re forinforma ona l purposes only a nd do not imply tha t MFS a dopts , supports or confirms in a ny wa y thera ng s /recommenda ons , opinions or conclus ions of the a na lys ts . This document is not directed or intended fordis tribu on to, or use by, a ny person or en ty who is a ci zen or res ident of or loca ted in a ny loca lity, s ta te , country, orother jurisdic on where such dis tribu on, publica on, a va ila bility or use would be contra ry to la w, reg ula on or whichwould s ubject MFS or its a ffilia tes to a ny reg is tra on or licens ing requirements within such jurisdic on. MFS a ccepts nolia bility for a ny direct, indirect, or consequen a l da ma g es or losses incurred by third pa r es including its clients from a nyuse of this document or its contents .

Issuer of Report

Muba sher Fina ncia l Services BSC (c) is a n Inves tment Bus iness Firm Ca teg ory 1, licens ed a nd reg ula ted by the Centra l Ba nkof Ba hra in.Webs ite : www.Muba sherTra de.comE-ma il: Resea rch@Muba sherTra de.com

To unsubs cribe or edit preferences plea s e click here . For the types of reports to be rece ived, plea se cha ng e yourpreferences in your a ccount a t www.Muba sherTra de.com.

Contact Details

INSTITUTIONAL SALES

MENA

Inst.Sales@MubasherFS.co m +9 71 4321116 7 (UAE) +9 6 5 9 7734334 (Kuwait) +9 6 2 79 5538 8 0 6 (Jo rd an)

Egypt

Institutio ns-Egy@Mubasher.net +20 2 226 23310

RETAIL SALES

Bahrain

Glo bal@MubasherTrad e.co m Call Center: +9 73 8 0 0 56 7 0 0 0

Egypt

Egypt@MubasherTrad e.co m Call Center: 16 6 9 9 / +20 2 226 2 3230

Libya

Libya@MubasherTrad e.co m Call Center: +218 9 230 7 0 350

RESEARCH

Research Team

Research@MubasherTrad e.co m

© Copyrig ht 2016, Muba sher Fina ncia l Services BSC (MFS) , ALL RIGHTS RESERVED. No pa rt or excerpt of this document ma y beredis tributed, reproduced, s tored in a retrieva l sys tem, or tra nsmi ed, on a ny form or by a ny mea ns , e lectronic, mecha nica l,photocopying , recording , or otherwise , without the prior wri en permiss ion of MFS. Muba sherTra de is a tra dema rk ofMuba sher Fina ncia l Services BSC. Muba sher Fina ncia l Services BSC (c) is a n Investment Bus iness Firm Ca teg ory 1, licensed a ndreg ula ted by the Centra l Ba nk of Ba hra in.