Crude Oil Price Update – Upside Bias Over $49.19 Gann Angle

September West Texas Intermediate crude oil futures are trading mixed on Tuesday. Volume and volatility are light for a fifth straight day. Prices are being capped by concerns over rising exports from OPEC. Prices are also being pressured by increased production from Libya. Support is being provided by speculators betting on a sixth straight week of U.S. inventory drawdowns.

Technical Analysis

The main trend is up according to the daily swing chart, however, upside momentum has stalled due to the closing price reversal top on August 1.

A trade through $50.43 will negate the closing price reversal top and signal a resumption of the uptrend. Taking out $48.37 will confirm the potentially bearish chart pattern.

The main range is $52.38 to $42.27. Its retracement zone is $48.52 to $47.32. The upper or Fibonacci level of this zone at $48.52 has been providing support for about a week. This is also helping to give the market an upside bias.

The short-term range is $45.40 to $50.43. Its retracement zone at $47.92 to $47.33 is the primary downside target. It falls inside the main retracement zone.

Forecast

Based on the current price at $49.41 and the earlier price action, the direction of the crude oil market today is likely to be determined by trader reaction to the downtrending angle at $49.19.

A sustained move over $49.19 indicates the presence of buyers. If volume increases along with volatility, we could see a surge into $50.43, followed by a downtrending angle at $50.79.

Crossing to the weak side of the angle at $49.19 will signal the presence of sellers. This could trigger a move into the Fib level at $48.52.

If $48.52 fails as support then look for a move into an uptrending angle at $48.15, followed by the short-term 50% level at $47.92.