Crude Oil Price Update – Looking for a Bullish Tone Over $47.77, Bearish Tone Under $47.49

October West Texas Intermediate crude oil futures are trading nearly flat shortly before the regular session opening as investors await further signs of marketing tightening. Traders could get further evidence from today’s American Petroleum Institute’s weekly inventories report, but especially Wednesday’s U.S. Energy Information Administration’s weekly inventories report.

Technical Analysis

The main trend is up according to the daily swing chart, but momentum has been trending lower for the entire month. A trade through $46.62 will change the main trend to down.

The main range is $50.51 to $46.62. Its retracement zone at $48.57 to $49.02 is the primary upside target. This zone stopped the rally on Monday at $48.91.

The short-term range is $46.62 to $48.91. Its retracement zone at $47.77 to $47.49 is currently being tested.

Buyers are going to come in on a test of the retracement zone in order to defend the trend. Aggressive counter-trend sellers are going to try to take out this zone in an effort to make $48.91 a secondary lower top.

Forecast

Based on the earlier price action, look for an upside bias to develop on a sustained move over $47.77. This could drive the market into a steep uptrending angle at $48.12. Overtaking this angle will indicate the buying is getting stronger. This could fuel an acceleration into $48.57 and $48.64.

A sustained move under $47.49 will signal the presence of sellers. This is followed by an uptrending angle at $47.37. If this angle fails then look for a sharp break into a series of levels at $47.00, $46.89 and $46.62.