Crude Oil Price Update – Bullish Over $52.42, Bearish Under $50.59, Sideways in Between

November West Texas Intermediate crude oil futures closed higher last week. The market continued to be supported by forecasts of increased demand from OPEC and the International Energy Administration. Geopolitical events also played a part in last week’s price action. Tensions continue to build around Iraqi Kurdistan. Prices could pop to the upside this week if the situation escalates enough to adversely affect supply.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. A trade through $52.86 will signal a resumption of the uptrend. If there is enough upside momentum on the move, we could see the rally extend into the next main top at $54.94. This is followed by $58.37.

The main range is $58.37 to $42.80. Its retracement zone at $50.59 to $52.42 is controlling the near-term direction of the market.

The short-term range is $46.14 to $52.86. Its retracement zone is $49.50 to $48.71.

Weekly Forecast

Based on last week’s close at $51.67, the direction of the crude oil market this week will be determined by trader reaction to the main Fibonacci level at $52.42 and the main 50% level at $50.59.

This suggests that next week’s price action will be all about momentum. If the geopolitical events escalate then the market could surge over $52.42. If they become a non-issue then prices could retreat under $50.59.

Hedge fund activity will also determine the tone of the market. If they are willing to buy strength then look for an upside breakout. If they want to buy value then look for a downside breakout into support.

A sustained move over $52.42 will indicate the presence of buyers. This could fuel a rally into last week’s high at $52.86 and a long-term downtrending angle at $53.50.

The angle at $53.50 is the trigger point for an acceleration to the upside with $54.94 the next target, followed by $55.93.

A sustained move under $50.59 will signal the presence of sellers. This could drive the market into the short-term retracement zone at $49.50 to $48.71. Since the main trend is up, buyers are likely to come in on a test of this zone.

Traders should also watch the price action on a test of the steep uptrending angle at $51.14. This angle could act like a pivot this week.