RDS

RDSa, Royal Dutch and the Can.$$ (CDW)

Hamilton

So what do Royal Dutch and the Canadian dollar have in common? Oil! Royal Dutch goes back a long way (Bataafsche  Petroleum Maatschappij N.V.) and is presently one of two of the largest integrated oil companies. The Canadian dollar is now a petro-dollar as they say, so , presumable what is good for one is good for the other and v.v..

 cdw 20112 rds feb2011

On the left is the Can.$ with its 5th wave up from around 78. This wave is clearly a wedge, an ending pattern that invariable will retrace to its origin or below 93. On the right is Royal Dutch with an equally clear B-wave, close to the usual 61% retracement, c=b etc. etc.  Time to exit both. First lets see if the stuff itself agrees; It does.

Brent 2011

Royal Dutch Shell RDS.A

Hamilton

RDS Jan 26, 2010

Royal Dutch is a good example of proper technical analysis and perhaps a reasonable indicator where energy stocks might go for the next little while. Predictions for oil vary from well above $200 to below $30 over the next year or so. Even assuming that one sides with the $200 scenario, this stock should have been sold because.

1. You do not simple want to guess.

2. The RSI is dropping like a stone.

3. The MACD is not confirming the tops.

4. The stock has retraced a near perfect 61.8% Fibonacci level

5. The rebound has a nice A-B-C pattern where C=A, give or take.

At the very least a stop-loss should be entered at about $55 to keep some of the profit from the lows of March. This applies to a good number of energy stocks.