ERY has approached a resistance level (blue line) and today should tell whether it will break through and continue following the upward channel (black lines). Point & Figure target for oil ($WTIC) shows a target in the low fifties, so ERY should go higher. The question is when. A backing off from the resistance level would be an entry opportunity. I blow through the resistance level would also. Not a bad choice. The resistance level will thereafter provide a good point for stop loss.The left-hand graph is daily; the right, hourly. The resistance level on the hourly is the more accurate. Without much imagination one should e able to spot the reverse head-and-shoulders pattern on the daily. Its target calculates as 34.
The major threat to this scenario is presented in the Times story Sunday on Israel being green-lighted on striking Iran's nuclear facilities. That happening would dump the market and sky-rocket oil, especially if the attack included Iran's oil facilities to inhibit financial recovery of their nuclear ambitions--not to mention financing terrorist interests in the region--and worldwide. Iran's latest election scams may cost them in ways they have yet to imagine--and adds new meaning to "meddling."
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