Crude Oil Price Update – Would Like to See Secondary Higher Bottom Form at $45.99 – $45.36

U.S. West Texas Intermediate crude oil futures are trading a little over 1% higher early Thursday, recouping some of its losses from the previous session. The market was being underpinned by a U.S. government report that showed a smaller-than-expected rise in crude oil inventories the week-ending February 28. Gains are being capped, however, by uncertainties over cuts by major oil producers.

At 05:01 GM%, April WTI crude oil is trading $47.28, up $0.50 or +1.09%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending higher since Monday’s closing price reversal bottom and its subsequent confirmation on Tuesday.

A trade through $43.32 will negate the closing price reversal bottom and signal a resumption of the downtrend. The main trend will change to up on a trade through $54.66.

The short-term range is $54.66 to $43.32. Its retracement zone at $48.99 to $50.33 is the primary upside target.

The minor range is $43.32 to $48.66. Its retracement zone at $45.99 to $45.36 is the nearest downside target.

Daily Swing Chart Technical Forecast

The trend is down so we may see a further decline into the minor retracement zone at $45.99 to $45.36. Aggressive counter-trend buyers may come in on a test of this area. They are going to try to form a secondary higher bottom. If $45.36 fails as support then look for a possible retest of the multi-year low at $43.32.

Additionally, since the trend is down, bearish traders are defending the retracement zone at $48.99 to $50.33. Taking out $50.33 will indicate the short-covering is getting stronger. This could trigger an acceleration to the upside with the next major target the main top at $54.66.

Side Notes

The first leg up from a prolonged move down is usually fueled by short-covering. This often leads to a short-term pullback into a 50% to 61.8% retracement zone. If the market is going to move higher then buyers will come in on a test of this retracement zone. If they can form a secondary higher bottom then look for an eventual breakout over $50.33.