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Crude Oil Price Update -Trying to Establish Support on Bullish Side of Retracement Levels

By:
James Hyerczyk
Published: Jul 14, 2019, 10:57 UTC

Based on Friday’s price action and the close at $60.30, the direction of the September WTI crude oil futures contract on Monday is likely to be determined by trader reaction to the main Fibonacci level at $60.18.

WTI Crude Oil

U.S. West Texas Intermediate crude oil futures finished the week nearly 5% higher with most of those gains attributed to the shutdown off nearly half the rigs in the Gulf of Mexico due to a tropical storm, however, the price action was muted on Friday as traders mulled the impact of lower future demand.

On Friday, September WTI crude oil futures settled at $60.30, up $0.02 or +0.03%.

WTI Crude Oil
Daily September WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum shifted to the downside with the formation of the closing price reversal top at $61.02 on July 11 and the subsequent confirmation on Friday.

A trade through $61.02 will negate the closing price reversal top and signal a resumption of the uptrend. This could trigger a break out to the upside with the next target top coming in at $64.02.

The main trend is safe for now with a change in trend taking place on a move through $56.13.

The main range is $65.92 to $50.91. Its retracement zone at $60.18 to $58.41 is controlling the near-term direction of the market.

The short-term range is $50.91 to $61.02. Its retracement zone at $59.01 to $57.47 is also a potential downside target.

Combining the two retracement zones makes $59.01 to $58.41 the best support area.

Daily Swing Chart Technical Forecast

Based on Friday’s price action and the close at $60.30, the direction of the September WTI crude oil futures contract on Monday is likely to be determined by trader reaction to the main Fibonacci level at $60.18.

Bullish Scenario

A sustained move over $60.18 will indicate the presence of buyers. If this creates enough upside momentum then look for a breakout over $61.02. This is a potential trigger point for an acceleration to the upside with the next major target the $64.02 main top from May 20.

Bearish Scenario

A sustained move under $60.18 will signal the presence of sellers. The first downside target is the short-term Fibonacci level at $59.01. Since the main trend is up, buyers could come in on a test of this level.

If $59.01 fails as support then look for the 50% level at $58.41 to provide support. If this fails then the selling is likely to extend into the next 50% level at $57.47.

Overview

The 200-day Moving Average comes in at $59.12. Watch the price action and read the order flow on a test of this level. Hedge fund buyers could come in to defend the uptrend.

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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