OEL (ASX) technical update

Originally posted by ecneitap: ↑

The next few days are important technically for the stock - unless of course there is something seriously going wrong behind the scenes (which is always possible if we wish to stay objective - it is the stock market after all and we would be naive to think we know everything going on here !!!) . Yet I'm going to look at this with rose coloured glasses and summarise as follows:

1) For the most part weakness has been capital raising influenced IMO (yep - I'm a broken record). Two capital raisings back to back have created too much supply. I've seen it a million times before with other stocks - it always takes far longer than anyone expects to get eaten away - which includes large off market trades going through / cross trades / portfolio readjustments (perhaps EOFY influences as well) etc etc - all I can say is I hope Molton are still happy to hang in there (note: more supply if they ever decided to exit or reduce their holding)

2) The gap was left at 4.3c on the 4th February and yesterday we tagged 4.4c on high volume (I include off market trades in my volume calculations) - the high volume is important - what you often see at the end of trends is high volume washouts - they look terrible on the chart yet its a footprint that the worst could be over (or nearing an end) as it often shakes out the last of the weaker hands. We may have that now - or at worst within the next fews days (note. price may still want to fully close the gap first)

3) Oil was up over 4% last night and that's fine, yet my view is that Oil stocks moving forward will be trading on whether Oil is going to establish a sustained uptrend or downtrend, not daily fluctuations. Price action on my Crude Oil chart is sitting on a cliff edge - I'm labelling it longer term bullish at the moment, yet any move below $50.60 that sticks, then it could be a problem again with the bears taking over again. Obviously OEL is a producer now so its important what the medium to longer term technicals are telling us with Oil because the bigger players will also be looking at this and will drive the energy sector higher if they feel it is on the way up - they will also do the opposite though if bigger picture it establishes a downtrend. They don't look at daily movements, their tech guys look at bigger picture trends sector by sector.

Note: Crude Oil had a high volume bounce three sessions ago then the last two trading sessions (not including last night) were inside days on ultra low volume. So if today's move was on high volume and a potential key outside reversal day (I get the full data around 10am), then it will be a good start towards a potential reversal. It's still 50/50 though

4) From an Elliott Wave perspective, price in OEL has dropped to my maximum depth - a 78.6% pull back of the previous move forward targets 4.3c. It has lost some needed symmetry, and I prefer price doesn't tag maximum depth, but it is acceptable and no core rulings within the theory have been broken. It also tells me that below 4.3c is a problem and a red flag.

There is some other simple stuff going on here like price being well oversold on both the dailies and the weeklies. This means nothing on it's own of course, yet when combined with the other factors mentioned it has some substance as naturally oversold positions are launching pads if backed by other factors.

Nothing else to say really - if nothing is going on in the back ground that is a serious issue (as yet undisclosed), then within the next few days we should finally see some demand coming back into play. So the downside move since early March and all the games being played with the added supply is starting to look well exhausted. Bigger picture we need to remember as well that the stock has been basing in a range for over a decade now (with one upside fake out included) - I still maintain when this base finally breaks higher (if it breaks higher ?), price will head pretty quickly towards 14 - 15c which is the basing pattern breakout target.

The above analysis fails miserably though via a close below 4.3c (note the word 'CLOSE' ) . E.

Expand

Crude Oil futures trade on the long side has triggered at 54.85. I'm sensing a perfect storm on the horizon !!?? Needs to close strong tonight to have backing. E

'Note: Crude Oil had a high volume bounce three sessions ago then the last two trading sessions (not including last night) were inside days on ultra low volume. So if today's move was on high volume and a potential key outside reversal day (I get the full data around 10am), then it will be a good start towards a potential reversal. It's still 50/50 though'

No.	Vol.	Price($)
9	17892904	1.2¢

No.

Vol.

Price($)

17892904

1.2¢

Price($)	Vol.	No.
1.3¢	12332282	21

Price($)

Vol.

No.

1.3¢

12332282

No.	Vol.	Price($)
7	9809601	0.012
10	5564827	0.011
3	3550000	0.010
1	100000	0.009
2	245123	0.008

No.

Vol.

Price($)

9809601

0.012

5564827

0.011

3550000

0.010

100000

0.009

245123

0.008

Price($)	Vol.	No.
0.013	10350127	17
0.014	5437214	11
0.015	6077000	11
0.016	200004	1
0.017	372000	2

Price($)

Vol.

No.

0.013

10350127

0.014

5437214

0.015

6077000

0.016

200004

0.017

372000

(20min delay)
Last 1.3¢		Change 0.001(8.33%)		Mkt cap ! $62.33M

Open	High	Low	Value	Volume
1.2¢	1.3¢	1.2¢	$12.34K	1.028M

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