Crude Oil Price Update – Closing Price Reversal Bottom Confirmed; Needs to Hold Above $47.26

October West Texas Intermediate Crude Oil futures are trading higher on Friday. The early rally has confirmed yesterday’s closing price reversal bottom chart pattern. This could lead to the start of a 2 to 3 rally that could lead to a 50% to 61.8% retracement of the last sell-off.

Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the $50.51 main top on August 1. Yesterday’s closing price reversal bottom didn’t come as a surprise since the session began with the market in the window of time for a turnaround. They tend to occur after 7 to 10 days so this move was overdue.

The main retracement zone is $46.52 to $45.57. This zone is the primary downside target, but it looks like buyers came in early at $46.62 on Thursday.

The new short-term range is $50.51 to $46.62. If the rally continues then we could see an eventual move into its retracement zone at $48.57 to 49.02 by next Tuesday.

Forecast

Based on the current price at $47.40 and the earlier price action, the direction of the crude oil market today is likely to be determined by trader reaction to the downtrending angle at $47.26.

A sustained move over $47.26 will indicate the presence of buyers. The daily chart is wide open to the upside so we could see an acceleration. The next potential targets are the 50% level at $48.57, the downtrending angle at $48.89 and the Fibonacci level at $49.02.

A sustained move under $47.26 will signal the presence of sellers. This could lead to a pullback into the uptrending angle at $46.77, followed closely by the reversal bottom at $46.62 and the major 50% level at $46.52.

The 50% level at $46.52 is a possible trigger point for an acceleration into $45.57.