Crude Oil Price Update – Trend Up, but Weekly Reversal Top May Be Signaling Shift in Momentum

May West Texas Intermediate Crude Oil futures started the week on a high note, hitting a new high for the year. However, profit-takers came in on the move to drive prices lower for the week. The problem may have been that the recent rally was fueled by speculation that the OPEC-led production cuts would be extended into 2019, but the selling was driven by real numbers like bigger-than-expected inventories according to the American Petroleum Institute and the U.S. Energy Information Administration.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. Last week’s trade through $66.02 confirmed the uptrend. However, the weekly closing price reversal top may have signaled a shift in momentum to the downside. It may also be a sign that the selling is greater than the buying at current price levels.

A move through $66.55 will signal a resumption of the uptrend while a trade through $59.91 will change the minor trend to down. The selling will get stronger on a trade through $57.60 and the main trend will change to down if $55.90 is taken out.

The short-term range is $57.60 to $66.55. Its retracement zone at $62.08 to $61.02 is the primary downside target.

The main range is $47.50 to $66.55. Its retracement zone at $56.76 to $54.57 is a major support area.

Weekly Technical Forecast

Based on last week’s close at $64.94 and the recent price action, the direction of WTI crude oil this week is likely to be determined by trader reaction to the uptrending Gann angle at $64.00.

A sustained move over $64.00 will indicate the presence of buyers. If this generates enough upside momentum, buyers may challenge last week’s high at $66.55. Taking out this price could trigger a further rally into $68.69.

A sustained move under $64.00 will signal the presence of sellers. If this move attracts enough sellers then look for a drive into the 50% level at $62.08, followed by the Fibonacci level at $61.02. The market starts to open up to the downside under the Fib level.