Crude oil at US$78.05

Crude oil closed at US$78.05 on Christmas Eve. With this being an extremely cold winter in the northern hemisphere, the price of crude oil might go higher. This would make Darryl Guppy's prediction of a post Christmas high of US$100 closer to reality.

If crude oil breaks the recent high of US$83 achieved on 21 Oct this year, we could expect crude palm oil to follow closely and appreciate in price as well. That would be good news for counters like Golden Agriculture.

Technically, crude oil has been in a correction since peaking on 21 Oct. The short term trendline from 21 Oct has been tested 3 times on 4 Nov, 18 Nov and 1 Dec. Price took a plunge from there and only bottomed on 14 Dec. Closing at US$78.05 means that oil is still in a correction stage. We want to see crude oil closing at US$79.00 or higher in the next few sessions to see this broken. We want to see confirmation in time with price action forming higher lows and higher highs.

The candlesticks formed in the last three sessions for crude oil look like a three white soldiers formation. If the formation follows through, oil is set to move higher sooner rather than later. The longer term trend for crude oil is still up.

Charts for Healthway Medical

It is clear to see from the declining MFI that Healthway's price lacks buying momentum. Price is currently at 12c, midpoint of a cup pattern formed from June to August this year. The brim of the cup is at 14.5c and the trough at 9.5c. A cup and handle formation is usually an uptrend continuation pattern but this handle is too long. The 20dMA, 50dMA and 100dMA have all bundled above recent price action and impose resistance at 12.5c. Support is provided by the rising 200dMA, currently at 11c. With the proposed rights issue and a TERP of 11c, the support provided by the 200dMA might be tested in time. However, volume has been diminishing with the declining price. There is no negative divergence and I do not foresee any drastic price decline.


On the weekly chart, we see a buy signal on the MACD, the first in 4 months. However, the lack of buying momentum and volume makes this signal suspect. The rising 50wMA provides support at 10.5c in case of a bigger price decline.

Strategy: Overall, price action looks rather weak. Buying now would be a hedge at best and it would be a long term investment. As I am already vested, I will accumulate if a pullback to 11c happens.