WTIC- the MACD has just hooked down

From the daily chart, we can see that WTIC's MACD indicator has just done a negative cross-under. The last time that we saw this was in late March when WTIC underwent a minor correction-- lasting 4-5 weeks-- with prices dropping back to the 50-day SMA line. It is probable that WTIC may experience a similar correction soon, with the prices pulling back to the 50-day SMA (presently at USD60-62).

Of late, the mainstream has put up many articles on the crude oil price bubble. So, a sharp reversal in WTIC could be a serious psychological blow to investors presently conditioned to higher crude oil prices. This may then lead to an over-reaction & a sharp sell-off in oil & gas stocks. You may want to reduce your position ahead of the crowd.


Chart: WTIC's daily chart as at 19/6/2009 (Source: Stockcharts.com)