Based on the current set-up, the Fib level at $52.52 is a trigger point for a potential acceleration to the upside. If strong buyers come in on the move then look for a surge into the intermediate 50% level at $54.20.
U.S. West Texas Intermediate crude oil futures are trading higher during the extended trading period on Friday, putting it in a position to post its first weekly gain since early January. Market sentiment improved all week after a massive sell-off drove prices to a multi-month low as investors bet on OPEC+ increasing their production cuts. The price action also suggests that traders believe the economic impact of the coronavirus would be short-lived.
At 21:36 GMT, April WTI crude oil futures are trading $52.40, up $0.74 or +1.43%.
The main trend is up according to the daily swing chart. The main trend turned up earlier on Friday when buyers took out the last main top at $52.34. The main trend will change to down on a move through the last two main bottoms at $49.63 and $49.50.
The short-term range is $54.39 to $49.50. Its retracement zone at $51.95 to $52.52 is the first upside target. This area is currently being tested.
The intermediate range is $58.90 to $49.50. Its retracement zone at $54.20 to $55.31 is the next upside target along with the main top at $54.39.
The trend changed to up on Friday when the market crossed a swing top at $52.34. Crossing to the strong side of steep downtrending Gann angle at $51.99 also indicated increasing buying power. Overcoming the Fibonacci level at $52.52 will be a third indication that the buying is greater than the selling at current price levels.
Based on the current set-up, the Fib level at $52.52 is a trigger point for a potential acceleration to the upside. If strong buyers come in on the move then look for a surge into the intermediate 50% level at $54.20, followed by the next main top at $54.39.
On the downside, support is clustered at $51.99, $51.95 and a short-term uptrending Gann angle at $51.63.
If the uptrending Gann angle at $51.63 fails as support then look for a further pullback into a pair of uptrending Gann angles at $50.63 and $50.13. The latter is the last potential support angle before the $49.63 and $49.50 main bottoms.
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.