Crude Oil Price Update – Steep Stock Market Sell-off Could Elevate Volatility

May West Texas Intermediate crude oil is trading lower, but attempting to claw back its early losses. Pressuring the market today is concerns over rising U.S. production in response to another increase in the rig count. Underpinning the market is a weaker U.S. Dollar and Middle East tensions. Lower equity prices could weigh on the market throughout the session.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. After almost a month-long consolidation, the trend changed up on Friday when buyers took out the previous main top at $62.22. The new main bottom is $60.18. A trade though this level will change the main trend to down.

If the buying continues to strengthen over $62.22 then this could create the upside momentum needed to challenge the next main top at $63.05. This is a potential trigger point for an acceleration into the February 26 main top at $64.07.

The short-term range is $64.07 to $59.91. Its retracement zone at $61.99 to $62.48 is currently being tested. Trader reaction to this zone will determine the near-term direction of the market.

The main range is $57.60 to $64.07. Its retracement zone at $60.84 to $60.07 is the main downside target. This zone provided support three times on breaks into $59.99 on March 2, $59.91 on March 8 and $60.18 on March 14.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the crude oil market today is likely to be determined by trader reaction to the short-term 50% level at $61.99.

A sustained move over $61.99 will indicate the presence of buyers. This could drive the market into the Fib level at $62.48, followed by Friday’s high at $62.60. This price is a possible trigger point for an extension into $63.05.

A sustained move under $61.99 will signal the presence of sellers. This is a possible trigger point for the start of a steep sell-off. The daily chart indicates there is room to break with $60.84 the first target.