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Crude Oil Price Update – Trader Reaction to $24.52 – $24.50 Will Set the Tone

By:
James Hyerczyk
Published: Mar 20, 2020, 13:40 UTC

The test of $24.52 to $24.50 is very important to the near-term structure of the market. This is because counter-trend buyers may come in on a test of this area in an effort to form a potentially bullish secondary higher bottom.

oil barrels

U.S. West Texas Intermediate crude oil futures are trading lower on Friday after giving back earlier gains. Volatility is at the forefront as traders are being forced to deal with expectations of lower demand due to a global recession, and the strong possibility that Saudi Arabia and Russia will flood the market with about 4 million barrels of oil after April 1.

At 13:25 GMT, May WTI crude oil is at $25.13, down $0.78 or -3.01%.

Losses are likely being dampened on speculation that President Donald Trump will intervene to bring an end to the price war between Saudi Arabia and Russia. Prices could skyrocket if the two countries announce a truce.

Daily May WTI Crude Oil

Daily Technical Analysis

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

The minor trend is also down. The new minor bottom is $20.52.

The minor range is $20.52 to $28.49. Its 50% level or pivot at $24.50 is the first downside target.

The short-term range is $36.70 to $20.52. Its retracement zone at $28.61 to $30.52 is the primary upside target. This zone is potential resistance.

Daily Technical Forecast

Based on the early price action and the current price at $25.13, the direction of the May WTI crude oil market the rest of the session on Friday is likely to be determined by trader reaction to the support cluster at $24.52 to $24.50.

Bullish Scenario

A sustained move over $24.52 will indicate the presence of buyers. If this move creates enough upside momentum then look for a possible rally into the short-term 50% level at $28.61. This is followed by a downtrending Gann angle at $29.70 and a short-term Fibonacci level at $30.52.

Bearish Scenario

A sustained move under $24.50 will signal the presence of sellers. The next two downside targets are a pair of uptrending Gann angles at $22.52 and $21.52. The latter is the last potential support angle before the $20.52 main bottom.

Side Notes

The test of $24.52 to $24.50 is very important to the near-term structure of the market. This is because counter-trend buyers may come in on a test of this area in an effort to form a potentially bullish secondary higher bottom.

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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