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Crude Oil Price Update – Trend Changes to Up on Trade Through $53.61

By:
James Hyerczyk
Published: Jan 18, 2019, 14:07 UTC

Based on the early price action, the direction of the March WTI crude oil futures contract on Friday is likely to be determined by trader reaction to the downtrending Gann angle at $53.04.

Crude Oil

U.S. West Texas Intermediate crude oil futures are edging higher on Friday on the hopes that a new trade deal between the U.S. and China would lead to increased demand. The market is also being supported by a report from OPEC showing adherence to its plan to cut production, trim the excess supply and stabilize prices. Gains are being capped by worries about rising U.S. production and OPEC’s cut in demand.

At 1340 GMT, March WTI crude oil futures are trading $52.95, up $0.59 or +1.12%.

WTI Crude Oil
Daily March WTI Crude Oil

 

Daily Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through $53.61 will negate a closing price reversal top while changing the main trend to up. A move through $50.66 will signal a resumption of the downtrend.

The minor trend is up. This is helping to generate the upside momentum. A trade through $51.29 will change the minor trend to down. This will also shift momentum to the downside.

The short-term range is $53.61 to $50.66. Its 50% level or pivot at $52.14 is controlling the near-term direction of the market. Holding above this zone today is helping to generate an upside bias.

Daily Technical Forecast

Based on the early price action, the direction of the March WTI crude oil futures contract on Friday is likely to be determined by trader reaction to the downtrending Gann angle at $53.04.

Bullish Scenario

A sustained move over $53.04 will indicate the presence of buyers. The next target is the main top at $53.61. Overtaking this top could create the upside momentum needed to challenge the next downtrending Gann angle at $54.01. This is the last potential resistance angle before the $54.98 main top.

Bearish Scenario

The inability to overcome $53.04 will signal the presence of sellers. If this generates enough downside momentum then look for a break into the short-term pivot at $52.14.

The selling pressure could increase under $52.14 with the next target angle coming in at $51.17. This is followed by a downtrending Gann angle at $51.01.

Crossing to the weak side of $51.01 will put crude oil in a bearish position with $50.66 the next target. This price is the trigger point for an acceleration to the downside with $48.14 the next major target.

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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