December West Texas Intermediate Crude Oil futures are trading lower shortly before the opening on Friday. There was no follow-through to the upside
December West Texas Intermediate Crude Oil futures are trading lower shortly before the opening on Friday. There was no follow-through to the upside following yesterday’s strong surge which suggests the price action was fueled by short-covering rather than aggressive buying.
The main trend is up according to the daily swing chart, however, the market has been under pressure since September 28.
The main range is $46.14 to $52.86. Its retracement zone at $50.23 to $49.60 is support. The market has been straddling this zone all week. It is controlling the longer-term direction of the market.
The new short-term range is $52.86 to $59.76. Its retracement zone at $51.31 to $51.68 is the primary upside target.
Taking out $49.76 will indicate the selling is getting stronger. It will also make $51.22 a secondary lower top.
Based on the current price at $50.07 and the earlier price action, the direction of the crude oil market today is likely to be determined by trader reaction to the 50% level at $50.23.
A sustained move under $50.23 will indicate the presence of sellers. This could drive the market into the weekly low at $49.76, followed by the Fib at $49.60 and an uptrending angle at $49.27.
The angle at $49.27 is also the trigger point for an acceleration to the downside with the next target an uptrending angle at $47.70.
Overcoming and sustaining a rally over $50.23 will indicate the presence of buyers. The next target is a resistance cluster at $51.31 to $51.36. This is followed by the Fibonacci level at $51.68.
Intraday, bearish under $50.23. Longer-term, bullish over $50.23, bearish under $49.60.
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.