With the market currently trading in the middle of its nearest uptrending Gann angles, and inside Friday’s range, traders should focus on trader reaction to Friday’s high at $57.81 and Friday’s low at $56.71. Taking out $57.81 then closing lower for the session will form a closing price reversal top. This could trigger a 2 to 3 day correction with an eventual break into at least $54.72.
U.S. West Texas Intermediate crude oil is inching higher on Monday, but remain under the multi-month high reached late last week. The market is being underpinned by the OPEC-led supply cuts and U.S. sanctions against Venezuela and Iran. Prices may be getting an additional boost from optimism over a U.S.-China trade deal.
Helping to slow gains are concerns over rising U.S. production, which hit 12 million barrels per day last month. However, these worries are being dampened a little by a report showing U.S. drillers cut the number of operating wells last week.
At 11:23 GMT, April WTI crude oil futures are trading $57.40, up $0.14 or +0.26%.
The main trend is up according to the daily swing chart. A trade through $57.81 will signal a resumption of the uptrend. A trade through $51.62 will change the main trend to down. This move is not likely, however, the market remains vulnerable to a potentially bearish closing price reversal top.
The minor trend is also up. A move through $53.51 will change the minor trend to down. This will also shift momentum to the downside.
The current short-term range is $51.62 to $57.81. Its retracement zone at $54.72 to $53.98 is the primary downside target.
On the upside, the main target is the major 50% level at $59.51.
With the market currently trading in the middle of its nearest uptrending Gann angles, and inside Friday’s range, traders should focus on trader reaction to Friday’s high at $57.81 and Friday’s low at $56.71.
A sustained move over $57.81 will indicate the presence of buyers. If this continues to generate enough upside momentum, we could see an eventual move into the major 50% level at $59.51.
A sustained move under $56.71 will signal the presence of sellers. This could trigger a break into an uptrending Gann angle at $56.12.
Taking out $57.81 then closing lower for the session will form a closing price reversal top. This could trigger a 2 to 3 day correction with an eventual break into at least $54.72.
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.