Crude Oil Price Update – Direction Being Controlled by Pivot at $52.19

U.S. West Texas Intermediate crude oil futures are trading lower early Friday amid concerns that a weakening Chinese economy will lead to lower demand. According to reports, China, the world’s second largest economy and the largest crude importer, announced some of the slowest retail sales and industrial output growth in years for November. This news encouraged long counter-trend buyers to take profits following Thursday’s more than 3 percent gains.

At 0912 GMT, February WTI crude oil is trading $52.48, down $0.34 or -0.66%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, the sideways trade suggests a loss of upside momentum.

A trade through $54.77 will signal a resumption of the uptrend. A move through $49.60 will change the main trend to down.

The minor trend is also up. It has changed direction a couple of times over the past seven sessions. A trade through $50.60 will change the minor trend to down. This will signal a shift in momentum to down.

The short-term range is $49.60 to $54.77. Its 50% level or pivot at $52.19 is controlling the near-term direction of the market.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at $52.48, the direction of the February WTI crude oil futures contract the rest of the session is likely to be determined by trader reaction to the pivot at $52.19.

Bullish Scenario

A sustained move over $52.19 will signal the presence of buyers. This will be a sign that they are attempting to defend the uptrend. If this move can create enough upside momentum then buyers are simply going to try to take out yesterday’s high at $53.50. This is a potential trigger point for an acceleration into the minor top at $54.44 and the main top at $54.77.

Bearish Scenario

A sustained move under $52.19 will indicate the presence of sellers. This move could attract enough sellers to drive the market into yesterday’s low at $50.60, followed by another minor bottom at $50.31 and the main bottom at $49.60.