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Crude Oil Price Update – Needs to Hold $51.98 to Sustain Upside Momentum

By:
James Hyerczyk
Published: Dec 5, 2018, 06:13 UTC

Based on the current price at $52.39, the direction of the January WTI crude oil market the rest of the session is likely to be determined by trader reaction to the short-term pivot at $51.98.

Crude Oil

U.S. West Texas Intermediate crude oil futures are trading lower Wednesday with prices being pressured by another U.S. inventory increase and a steep drop in U.S. equity markets. The weekly inventory report from the American Petroleum Institute (API) showed a larger-than-expected inventory build for the week-ending November 30. The threat of a global economic slowdown weighed on future demand.

At 0545 GMT, January WTI crude oil futures are trading $52.39, down $0.86 or -1.62%.

WTI Crude Oil
Daily January WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned higher on Monday when buyers took out the last swing top at $52.56. A trade through $54.55 will signal a resumption of the uptrend. The main trend changes to down on a trade through $49.41. This is followed by a pair of main bottoms at $47.96 and $46.00.

The minor trend is also up. A new main top has formed at $54.55.

The new short-term range is $49.41 to $54.55. Its 50% level or pivot is at $51.98. This price is controlling the near-term direction of the market. Since the trend is up, buyers could come in on a test of this level. They are going to try to form a secondary higher bottom.

On the upside, the next major upside target is the main Fibonacci level at $54.79. Overcoming this level could trigger an acceleration with a 50% level at $58.95 the next target.

Daily Swing Chart Technical Forecast

Based on the current price at $52.39, the direction of the January WTI crude oil market the rest of the session is likely to be determined by trader reaction to the short-term pivot at $51.98.

Bullish Scenario

A sustained move over $51.98 will indicate the presence of buyers. If this move creates enough upside momentum then look for a drive into $54.55, followed closely by $54.79. Look for an extension of the rally on a sustained move over $54.79. The daily chart indicates there is plenty of room to the upside.

Bearish Scenario

A sustained move under $51.98 will signal the presence of sellers. If this move attracts enough sellers then look for the move to extend further with the next major target the main bottom at $49.41.

About the Author

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.

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