Crude Oil Price Update – Trend Up, Momentum Down; Important Support Zone $53.91 to $53.19
U.S. West Texas Intermediate crude oil futures are trading sharply lower shortly before the extended close on Thursday. The selling is being driven by rising U.S. crude oil stocks, weak factory activity in China, and worries that the lack of progress over U.S.-China trade talks could put pressure on future demand growth.
At 20:25 GMT, December WTI crude oil is trading $54.16, down $0.90 or -1.63%.
Daily Technical Analysis
The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top on October 28.
A trade through $56.92 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through $52.46.
The minor trend is also up. A trade through $52.85 will change the minor trend to down. This will reaffirm the shift in momentum.
The intermediate range is $59.11 to $50.89. Its retracement zone at $55.00 to $55.97 is the first resistance.
The main range is $62.74 to $50.89. Its retracement zone at $56.82 to $58.21 is the second resistance zone. This zone stopped the rally at $56.92 on Monday.
The short-term range is $50.89 to $56.92. Its retracement zone at $53.91 to $53.19 is potential support. This zone was touched on Thursday.
Daily Technical Forecast
Based on the current price at $54.16 and the intraday low at $53.71, the key level to watch is the short-term 50% level at $53.91.
Holding above $53.91 will indicate that buyers have come in on the test of the retracement zone at $53.91 to $53.19. If this move is able to generate enough upside momentum then look for the rally to possibly extend into the intermediate 50% level at $55.00.
If $53.91 fails as support then look for the selling to possibly extend into the short-term Fibonacci level at $53.19. This is a potential trigger point for an acceleration to the downside.