Bitcoin

In my first post on Bitcoin on 20^th December 2017, I wrote, “Bitcoin is going to get interesting in coming days and it may not be pretty for many investors.” Bitcoin was trading at 17250 USD and I was expecting a very sharp correction in Bitcoin.

 In my follow up a post on 5^th February 2018 , I wrote, “Since then the price of Bitcoin crashed by more than 50% and is currently trading at 7360, Minor support for bitcoin exist at 6800 levels but I feel that it will just give some small respite to the speculator. Bitcoins should fall below 4000 in coming days.” Since February till last week Bitcoin consolidated at 6000- 8000 levels as expected and it broke below the support recently.

As you can see in the following chart. Bitcoin has broken below the support. It is currently trading at 4600 USD and very near to my expected target of 4000. I suspect that once it breaks 4000 it's going to be a very ugly site. The long-term chart of bitcoin suggests correction could go below 2000 but that will happen only once it trades below 4000 levels.  

Shanghai Composite

In my previous post on 8^th January 2016, Shanghai Composite index, I wrote, “Shcomp moved up from 3285 to 5050 levels before the equally spectacular crash after completing my target. Shcomp looks weak and will correct going forward.”

In the last three years, Shanghai composite continued its correction and made a low of 2479. The correction looks impressive if we consider that the index had spent three years doing time correction. 

If we look at the given chart, Shanghai Composite looks very interesting. Shanghai Composite is trading at the lower end of the 25-year-old channel and in past, it had bounced back from these levels for three times generating multi-bagger returns.

It seems to me that China is on the cusp of a major change if these levels hold Shanghai composite can multiply 2X or 3X from current levels in the next 5 years.  The risk-reward ratio seems extremely attractive from current levels.

Summary

1.      Long on Shanghai Composite at 2679

2.      Stop loss below 1900
3.      The target of 5000+ levels the over the next five years. 

Crude oil

In my previous post on crude oil written on 26^th November 2017, I wrote, “Any breakout above 60 USD looks difficult, I think crude will consolidate between 50$ - 60$ before any further breakout which can push the prices to 70$ – 77$ level. I think the most likely reason for the breakout will be further deterioration in the geopolitical situation in major oil-producing countries.

If we look at the long-term chart of crude, I think the bear market in crude oil started in 2008 and we are already into 10 years of bear market. I don’t think we are going back to 100$ levels anytime soon but crude is very likely to consolidate and trade between 50$ to 77$ depending on the geopolitical situation. I continue to maintain an upward and positive bias on crude oil over next 2 years with short-term correction looking imminent.”

Crude oil did not correct as excepted but it broke above the resistance level and hit the upside target of 77 USD as mentioned in my post. Since then Crude has corrected by 20%.

If we look at the given chart of WTI crude, we can see that it has a strong support at 60 USD. Most likely we will see a 6% to 10% bounce from the current levels and it may move up to 65$, but I expect that to be short lived. I think the price will again fall from there to 55$ where it will test the long-term channel support. This can happen before the end of December 2018

Summary:-

·         Expect WTI to fall to 55 USD before the end of December.

·         There can be some intermediate bounce in the price to 65$

·         Crude should find support at 55 USD