December West Texas Intermediate Crude Oil futures are trading flat early in the session on Monday. The hedge funds have been buying so I don’t expect a
December West Texas Intermediate Crude Oil futures are trading flat early in the session on Monday. The hedge funds have been buying so I don’t expect a change in trend over the near-term. However, the next move in the market will be determined by whether they continue to buy strength or play for a pullback into support.
Hedge funds and other money managers raised their bullish wagers on U.S. crude oil futures and options in the week to October 24, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Additionally, speculators raised their combined futures and options positions in New York and London by 15,041 contracts to 280,634 during the same period.
The main trend is up according to the daily swing chart. A trade through $54.20 will signal a resumption of the uptrend. If the move creates enough upside momentum then look for the rally to extend into the April 12 main top at $55.02.
Based on the earlier price action, the direction of the crude oil market today will be determined by trader reaction to the steep uptrending angle at $53.87.
A sustained move over $53.87 will indicate the presence of buyers. If this creates enough upside momentum then look for a possible test of $55.02 over the near-term.
A sustained move under $53.87 will signal the presence of sellers. The daily chart is wide open to the downside so we could see an acceleration to the downside. The first target is a support cluster at $52.42 to $52.37. This area is a value zone so we could see a technical bounce if this area is tested.
Watch the price action and read the order flow at $53.87 all session. Trader reaction to this angle will tell us if the buying is getting stronger or if sellers are taking control.
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.