Crude Oil Price Update – Forming Potentially Bearish Closing Price Reversal Top
September West Texas Intermediate crude oil is trading lower shortly before the regular session opening after an early session breakout failed to attract enough buyers to extend the rally.
The market is facing some headwinds today from hedging pressure and concerns that OPEC may not be able to control production enough to put a meaningful dent in global supply.
The main trend is up according to the daily swing chart. The next upside target is the May 25 main top at $52.38. The market isn’t in a position to turn the main trend to down, but it is in the window of time for a potentially bearish closing price reversal top. This chart pattern could lead to a 2 to 3 day correction. It is likely to occur if today’s American Petroleum Institute’s weekly supply report is bearish.
The main range is $52.38 to $42.27. Its retracement zone at $48.52 to $47.33 should be considered support.
Based on the current price at $49.91 and the earlier higher-high, the market is currently in a position to post a closing price reversal top.
If the market is able to recover and the buyers can take out today’s intraday high at $50.43 then look for a possible acceleration into the next long-term downtrending angle at $50.94. This is the last potential resistance angle before the $52.38 main top.
If the selling pressure continues then look for a test of the downtrending angle at $49.51. Crossing to the weak side of this angle will indicate the selling is getting stronger with the next target a support cluster at $48.52 to $48.40.
It looks as if the pressure is to the downside today so look for a minimum test of $49.51. Also watch for the reversal top.