Crude Oil Price Update – Trader Reaction to Gann Angle at $54.87 Will Set the Tone

December West Texas Intermediate crude oil futures are trading higher shortly before the regular session opening and today’s U.S. Energy Information Administration’s weekly inventories report at 1430 GMT. It is expected to show a 1.5 million barrel draw.

The catalyst behind today’s rally is a bullish American Petroleum Institute’s weekly inventories report that showed a bigger-than-draw in U.S. crude oil and gasoline inventories during the week-ended October 27.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The rally was reaffirmed when buyers took out the April 12 main top at $55.02. If the upside momentum continues then the next target will be the February 10 main top at $56.16.

Daily Forecast

Based on the current price at $55.04 and the earlier price action, the direction of the crude oil market the rest of the session will be determined by trader reaction to the uptrending Gann angle at $54.87.

A sustained move over $54.87 will indicate the presence of buyers. This angle is moving up at a rate of $0.50 per day. At this rate, it could reach $56.16 between November 3 and November 6.

A sustained move under $54.87 will signal the presence of sellers. The daily chart is wide open to the downside so if the move begins to gain traction then we could see an acceleration into the next uptrending Gann angle at $52.87.

Watch the price action and read the order flow at $52.87 all session. Trader reaction to this angle will tell us if the buying is getting stronger or if sellers have returned.