We could see some profit-taking as crude oil approaches the pair of tops at $65.63 and $66.02. However, this is normal and shouldn’t be a major concern unless it turns the market lower for the session.
May West Texas Intermediate crude oil futures soared on Wednesday to a six-week high on a surprise decline in U.S. crude inventories and as concern persisted over possible disruption to Middle East supply.
According to the U.S. Energy Information Administration (EIA), crude inventories showed a 2.6 million barrel draw. Analysts had expected a 2.5 million barrel build.
The main trend is up according to the daily swing chart. The current upside momentum suggests we could see a near-term test of the February 2 top at $65.63 and the January 25 top at $66.02.
The uptrend is safe at this time unless we close lower for the session.
The main range is $66.02 to $57.60. Its retracement zone at $62.80 to $61.81 is new support. Trading above this is zone is contributing to today’s upside bias.
We could see some profit-taking as crude oil approaches the pair of tops at $65.63 and $66.02. However, this is normal and shouldn’t be a major concern unless it turns the market lower for the session.
A closing price reversal top won’t mean the trend is changing, but it could indicate the selling is greater than the buying at current price levels.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.