Crude Oil Price Update – Momentum Shifts to Downside Under Minor Bottom at $51.15

U.S. West Texas Intermediate crude oil futures are trading sharply lower on Monday on renewed demand concerns amid the rapid spread of the coronavirus in South Korea, Italy and Iran. For weeks, traders have been worried about a drop in demand in China, but now that the virus is spreading faster outside of mainland China, the problem with lower demand has become a global issue.

At 11:29 GMT, April WTI crude oil is at $51.28, down $2.10 or -3.93%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum may be getting ready to shift to the downside. The main trend changes to down on a move through a pair of main bottoms at $49.63 and $49.50. A trade through $54.66 will signal a resumption of the uptrend.

The minor trend is also up. A trade through $51.15 will change the minor trend to down. This move will shift momentum to the downside.

The short-term range is $49.50 to $54.66. The market is currently trading on the weak side of its retracement zone at $51.49 to $52.09. This area is new resistance.

The main range is $58.90 to $49.50. Its retracement zone at $54.20 to $55.31 is major resistance. It stopped a rally at $54.66 last week.

Daily Technical Forecast

Based on the early price action and the current price at $51.28, the direction of the April WTI crude oil futures contract the rest of the session on Monday is likely to be determined by trader reaction to the Fibonacci level at $51.49.

Bearish Scenario

A sustained move under $51.49 will indicate the presence of sellers. This could lead to a labored break with potential Gann angle targets coming in at $51.13, $50.76 and a support cluster at $50.31 to $50.19. This is the last potential support area before the two main bottoms at $49.63 and $49.50.

Bullish Scenario

A sustained move over $51.49 will signal the presence of buyers. This could trigger a short-covering rally into the short-term 50% level at $52.09, followed by the steep downtrending Gann angle at $52.66. This is a potential trigger point for an upside breakout.