Gordon Kristopher

The Real Strength Index (or RSI) is a measure of a stock’s overbought and oversold position. The commonly used RSI is a 14-day RSI. It refers to the 14-day stock price that’s used to calculate the RSI.

In technical analysis, volume measures the number of a stock’s shares that are traded on a stock exchange in a day or a period of time. Volume is important because it confirms trend directions.

We’ll discuss the importance and use of these technical indicators. These indicators are useful in determining trends and making informed decisions.

In the rectangle pattern, it’s advisable to buy stock at support and sell at resistance. This pattern is formed in the uptrend and downtrend.

The inverted head and shoulder pattern is the reverse of the head and shoulder pattern. It’s formed at the bottom of the downtrend.

The double top pattern forms in the uptrend. In this pattern, two consecutive peaks are formed. The peaks both have roughly the same price level.

Stocks are in an uptrend when they’re making higher highs and higher lows. An uptrend forms when psychological or fundamental factors are improving.

It’s advisable to sell stocks on bounces when the stock is in a downtrend. In a sideways trend, it’s advisable to buy stock at support levels and sell at resistance levels.

Price patterns are trends that occur in stock charts. The charts are used in technical analysis. The pattern forms recognizable shapes. Price patterns are used to forecast the prices.

Entry and exit strategy is recommended for short and long-term trading in technical analysis. Fundamental analysis is used for the long-term entry and exit point.

The Bullish Abandoned Baby candlestick pattern is a reversal pattern. The pattern has three candles. It forms at the bottom of a trend. In this pattern, the first candle is any long and bearish candle.

Technical analysis is used to forecast stocks. All of the technical indicators give possible entry and exit points. The forecasting accuracy isn’t 100%. This is one of disadvantages of technical analysis.

High market share gives OPEC bargaining power to price oil above a competitive market. It can sway crude oil prices by increasing or decreasing production.

Knowing the breakeven price of crude oil is important when trying to figure out what OPEC needs in order to regain market share.

Crude oil prices have been on a roller coaster ride in 2014. This series will help crude oil investors recognize key factors that are impacting oil prices.

Before learning the costs components of crude oil extraction, let’s take a look at how producers extract crude oil from the ground.

The US dollar plays a major role in the price movements of commodities such as gold and crude oil. A strengthening US dollar is often seen as negative.

Recent consensus says the production cost of crude oil could range from $20 to $25 per barrel.

The common factor during an economic crisis is that economic growth slows down. Demand declines, which has a negative impact on oil prices.

A glut in crude oil supply could mean that political tensions in the near term may not impact oil prices.

February WTI crude oil futures contracts fell 0.9% to $63.73 per barrel on January 16. Brent oil futures fell 1.6% to $69.15 per barrel on the same day.

According to the EIA, US crude oil production increased by 28,000 bpd (barrels per day) to 9,782,000 bpd on December 22–29, 2017.

Hedge funds’ net long positions in US natural gas futures (UGAZ) (UNG) and options contracts were at 5,318 for the week ending January 2, 2018.

US crude oil production fell by 290,000 bpd (barrels per day) or 3% to 9,492,000 bpd between December 29, 2017, and January 5, 2018.

Analysts expect that Cushing crude oil inventories could have declined on January 5–12, 2018. A fall in Cushing inventories is bullish for oil prices.

On January 16, 2018, Goldman Sachs said that crude oil prices could exceed its forecast in the coming months.

According to the EIA, OECD’s crude oil inventories declined 0.2% to 2,865 MMbbls in January 2018—compared to the previous month.

The EIA estimates that Venezuela’s crude oil production increased by 15,000 bpd to 1,620,000 bpd in February 2018—compared to January 2018.

US crude oil inventories fell by 1.1 MMbbls (million barrels) to 411.6 MMbbls on January 12–19, 2018. Inventories decreased 0.3% week-over-week.

According to the EIA, US gasoline inventories increased by 3.1 MMbbls (million barrels) to 244 MMbbls on January 12–19, 2018.

The US Dollar Index (UUP) fell 0.34% to 90.09 on January 23—the lowest level since December 2014. The fall supported crude oil prices on January 23, 2018.

The EIA estimated that four-week average US gasoline demand decreased by 190,000 bpd (barrels per day) to 8,904,000 bpd on January 5–12, 2018.

On January 21, the NOC (National Oil Corporation) of Libya said that it would restart the Wintershall AG’s Sara oilfield. NOC is a state-owned oil company.

On January 19, 2018, Baker Hughes released its weekly US crude oil rigs report. US crude oil rigs decreased by five to 747 on January 12–19, 2018.

According to PointLogic, US dry natural gas production increased by 0.3 Bcf (billion cubic feet) per day to 75.7 Bcf per day on January 11–17, 2018.

The EIA estimates that global crude oil inventories could rise in 2018 and 2019, which is bearish for oil prices.

The EIA estimated that Iraq’s crude oil production increased by 60,000 bpd to 4,380,000 bpd in December 2017—compared to the previous month.

Any increase in Iran’s crude oil production has a negative impact on oil prices. Lower oil (OIL) (DBO) prices are bearish for energy producers (IXC) (FXN).

US dry natural gas production rose by 1.2 Bcf (billion cubic feet) per day or 1.6% to 74 Bcf per day on January 4–10, 2018, according to PointLogic.

US natural gas inventories fell by 359 Bcf (billion cubic feet) to 2,767 Bcf between December 29, 2017, and January 5, 2018, according to the EIA.

US natural gas consumption fell 14.4% to 102.6 Bcf (billion cubic feet) per day on January 4–10, 2018, according to PointLogic.

US gasoline inventories rose by 4.1 MMbbls (million barrels) to 237.3 MMbbls between December 29, 2017, and January 5, 2018.

US crude oil inventories fell by 4.9 MMbbls (million barrels) to 419.5 MMbbls between December 29, 2017, and January 5, 2018.

The EIA forecast that Brent (BNO) crude oil would average $59.74 per barrel in 2018—4.3% higher than the previous estimates in December 2017.

The US Dollar Index fell ~9.8% in 2017. The dollar fell partly due to the improving economy outside the US. It was the worst annual drop since 2003.

February US crude oil (DWT) (SCO) futures contracts rose 0.8% and were trading at $63.46 per barrel at 1:13 AM EST on January 10, 2018.

According to the EIA, US gasoline demand fell by 835,000 bpd (barrels per day) or 8.8% to 8,650,000 bpd on December 22–29, 2017.

US crude oil futures contracts for February delivery fell 0.1% to $61.95 per barrel at 1:05 AM EST on January 5, 2018—the highest level since December 2014.

The EIA estimated that US gasoline inventories increased by 4.8 MMbbls (million barrels) or 2.1% to 233.1 MMbbls on December 22–29, 2017.

WTI crude oil (USL) prices are at their 30-month high. The US benchmark also opened above $60 per barrel in January for the first time since 2014.