Crude Oil Price Update – Major Weekly Upside Target is $59.51

U.S. West Texas Intermediate crude oil futures finished higher last week, putting the market in a position to challenge a major retracement zone. Trader reaction to this zone will determine the near-term direction of the market. Sellers are going to try to stop the rally in an effort to form a secondary lower top. Buyers are going to try to blast through the zone. Needless to say, we’re looking for heightened volatility and better-than-average volume.

For the week, April WTI crude oil settled at $57.26, up $1.28 or +2.29%.

Crude oil was primarily supported by the OPEC-led production cuts and the U.S. sanctions against Venezuelan exports. Helping to slow the rally were concerns over rising U.S. production, which hit 12 million barrels per day, according to the U.S. Energy Information Administration. The wildcard that could trigger a spike in prices to the upside is a U.S.-China trade deal.

Weekly Technical Analysis

The main trend is down according to the weekly swing chart, however, momentum is trending higher. The market isn’t close to changing its trend to up on the weekly chart. In fact, it hasn’t even hit 50% of its massive sell-off from early October to late December.

A trade through $43.00 will signal a resumption of the downtrend. That isn’t very likely to take place this week, however, given the normal weekly volatility. This week is the ninth week from the last main bottom. This puts the market in the window of time for a closing price reversal top. Forming a reversal top could trigger the start of a 2-3 week correction.

The minor trend is up. This is helping to support the momentum. A trade through $51.62 will change the minor trend to down. This will also shift momentum to the downside.

The main range is $76.01 to $43.00. Its retracement zone at $59.51 to $63.40 is the primary upside target. Since the main trend is down, look for sellers to come in on a test of this zone.

Weekly Technical Forecast

Based on last week’s price action and close at $57.26, the direction of the April WTI crude oil market next week is likely to be determined by trader reaction to the downtrending Gann angle at $55.01.

Bullish Scenario

A sustained move over $55.01 will indicate the presence of buyers. If this move can create enough upside momentum then look for the rally to possibly extend into the 50% level at $59.51. Look for a technical bounce on the first test of this level. Overtaking it, however, will indicate the buying is getting stronger. The next major upside target is the Fibonacci level at $63.40.

Bearish Scenario

A sustained move under $55.01 will signal the presence of sellers. The market could begin to weaken under this level with the next potential targets the uptrending Gann angle at $52.00 and the minor bottom at $51.62.