Crude Oil Price Update – Bullish Over $50.01, Bearish Under $49.61

December West Texas intermediate crude oil futures contract is trading flat shortly before the opening. The market is also trading inside Friday’s range which indicates investor indecision and impending volatility. Volume is below average due to a U.S. bank holiday.

Although the rig count increased slightly last week, traders are concerned about rising U.S. production and the growing supply glut being fueled by rising U.S. exports. Exports will continue to rise as long as the spread between Brent and WTI crude oil remains relatively wide.

Daily Technical Analysis

The main trend is up according to the daily swing chart, but momentum has been trending lower since September 28.

The main range is $46.59 to $53.11. Its retracement zone is $49.85 to $49.08. This zone is currently being tested.

The intermediate range is $48.09 to $53.11. Its retracement zone is $50.60 to $50.01.

The combination of the two retracement zones makes $49.85 to $50.01 an important pivot area. This area is controlling the direction of the market.

Daily Forecast

Based on the current price at $49.64, the direction of the market today is likely to be determined by trader reaction to the downtrending angle at $49.61 and the Fibonacci level at $50.01.

Crossing to the weak side of the downtrending angle at $49.61 will indicate the selling pressure is increasing. This could lead to a move into the major Fibonacci level at $49.08. This is also a trigger point for an acceleration into an uptrending angle at $48.22.

Overcoming a cluster of numbers and the Fibonacci level at $50.01 will signal the presence of buyers. This is the trigger point for an acceleration into the 50% level at $50.60. Taking out this level could lead to a test of the next downtrending angle at $51.36.

Basically, look for an upside bias to develop on a sustained move over $50.01 and for the downside bias to continue on a sustained move under $49.61.