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March 28, 2006
Oil Forms Rising Flag/Wedge
Let’s play a little what if. What could spur a rally on Wall Street? First, a sharp drop in oil prices could prompt the bulls. WTIC remains in an uptrend, but formed a rising flag or wedge over the last few weeks. These are POTENTIALLY bearish patterns that need to be confirmed. A move below the lower trendline and prior low (61) would confirm this pattern and project further weakness towards 55. As long as support holds, the bulls rule and this flag/wedge is only potential. XLE is challenging resistance at 55.
Posted by Arthur B. Hill at March 28, 2006 05:09 AM