Crude Oil Price Update – Key 50% Level at $50.23 Controlling Price Action

November West Texas Intermediate crude oil is trading flat on Tuesday shortly before the regular session opening. The range is extremely tight and volume is below average.

Yesterday, the market plunged after sell stops were hit under a long-term uptrending Gann angle. However, since the main trend is up, buyers came in to stop the price slide inside a retracement zone as expected.

The market is suffering from a boring news cycle. Recent price action has proven that this market needs a bullish headline to move higher and this is just not happening at the moment.

The initial rally was fueled by expectations of increased demand for crude oil according to OPEC and the International Energy Administration. But that is old news and bullish traders are asking for proof.

The wall of worry is forcing longs to reconsider their positions because of the possibility of increasing output by U.S. shale producers.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $47.49 will change the main trend to down. A move through $52.86 will turn the main trend higher.

The main range is $47.59 to $52.86. Its retracement zone at $50.23 to $49.60 provided support on Monday when the market broke to $50.07. Buyers are going to have to build a support base inside this zone to sustain the rally, otherwise, prices will fall further.

The short-term range is $52.86 to $50.07. If there is a new rally then its retracement zone at $51.47 to $51.80 will become the primary upside target.

Daily Forecast

Based on the current price at $50.44 and the earlier price action, the direction of the crude oil market today will be determined by trader reaction to the 50% level at $50.23.

A sustained move over $50.23 will indicate buyers are coming in to defend the trend. If they can create enough upside momentum then look for a possible rally into a cluster of numbers at $51.36, $51.47, $51.64 and $51.80. Buyers will have to clear these levels in order to trigger a breakout to the upside.

A sustained move under $50.23 will signal the presence of sellers. This is followed by yesterday’s low at $50.07 and the Fibonacci level at $49.60.

A break through $49.60 will signal a serious shift in momentum.