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Crude Oil Price Update – Sustained Move Over $24.82 Will Scare Weak Short-Sellers

By:
James Hyerczyk
Published: Mar 19, 2020, 16:44 UTC

Based on the early price action and the current price at $24.49, the direction of the May WTI crude oil futures contract the rest of the session on Thursday is likely to be determined by trader reaction to the steep downtrending Gann angle at $24.82.

Crude Oil WTI Brent

U.S. West Texas Intermediate crude oil futures are soaring on Thursday after the U.S. Department of Energy said on Thursday it will buy an initial 30 million barrels of oil for the Strategic Petroleum Reserve as an initial step to fulfill President Donald Trump’s directive to fill the reserve to help domestic crude producers, according to Reuters.

At 17:27 GMT, May WTI crude oil is trading $24.49, up $3.66 or +17.57%.

The reserve, held in caverns on the Texas and Louisiana coasts, has the capacity for an additional 77 million barrels. The solicitation for the first 30 million barrels will be for both sweet and sour crude oil and is focused on buying from small and midsize producers, the Energy Department said.

Daily May WTI Crude Oil

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, today’s inside move suggests the market may be going through a transition period from bearish to neutral. It often indicates trader indecision and impending volatility.

A trade through $20.52 will signal a resumption of the downtrend. The main trend will change to up on a trade through the last main top at $36.70.

The short-term range is $36.70 to $20.52. Its retracement zone at $28.61 to $30.52 is the primary upside target. Since the main trend is down, sellers could come in on a test of this zone.

The intermediate range is $48.82 to $20.52. Its retracement zone at $34.67 to $38.01 is another resistance area.

Daily Technical Forecast

Based on the early price action and the current price at $24.49, the direction of the May WTI crude oil futures contract the rest of the session on Thursday is likely to be determined by trader reaction to the steep downtrending Gann angle at $24.82.

Bullish Scenario

Crossing to the strong side of the angle at $24.82 will indicate the presence of buyers. This could create the upside momentum needed to challenge the short-term 50% level at $28.61.

Overcoming $28.61 will indicate the buying is getting stronger. This could fuel a surge into a resistance cluster at $30.52 to $30.70.

Bearish Scenario

A sustained move under $24.82 will signal the presence of sellers. This could lead to an intraday break into $23.09. This is followed by yesterday’s multi-year low of $20.52.

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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