Crude Oil Price Update – Gann Angle at $48.02 Controlling Weekly Direction

October West Texas Intermediate crude oil futures finished lower but well off their lows last week.  The rally late in the week was fueled by the news that a few of the major refineries were slowing coming back on line after the devastation in the Texas Gulf Coast area. This should prop up the market due to increased demand for crude oil.

The daily chart is full of noise, but the weekly chart gives a much clearer picture of the current price action.

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. A trade through $50.51 will change the main trend to up. A move through $42.52 will signal a resumption of the downtrend.

The short-term range is $42.52 to $50.51. Its retracement zone at $46.52 to $45.57 is support. This zone stopped the selling last week at $45.58.

The main range is $58.34 to $42.52. Its retracement zone at $50.43 to $52.29 is the primary upside target and possible resistance zone. Last week’s high at $50.51 stopped the rally the week-ending August 4.

Forecast

Based on last week’s close at $47.29, the direction of the crude oil market this week is likely to be determined by trader reaction to the uptrending Gann angle at $48.02.

Overcoming $48.02 and sustaining the rally will put crude oil in a bullish position with $49.59 the first target. Taking out this level could generate the upside momentum needed to challenge the 50% level at $50.43, followed by the main top at $50.51.

Taking out $50.51 could trigger an acceleration to the upside with potential targets at $52.29 and $52.50.

The inability to overcome $48.02 will signal the presence of sellers. This could trigger a pullback into $46.52, followed by $45.57 and $45.27.

Look out to the downside if $45.27 fails as support. This could lead to a break into the next uptrending angle at $43.90.