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Crude Oil Price Update – WTI Bullish Over $49.02, Bearish Under $48.57

By:
James Hyerczyk
Updated: Aug 21, 2017, 12:10 UTC

October West Texas Intermediate crude oil futures are trading higher shortly before the regular session opening. The market is being underpinned by

Crude Oil

October West Texas Intermediate crude oil futures are trading higher shortly before the regular session opening. The market is being underpinned by speculation the global market maybe starting to balance. However, gains are being limited by profit-taking after last week’s surprise rally. Traders are also using this week’s inventory report and concerns over compliance with OPEC’s plan to cut production as excuses to trim positions.

In other news, Baker Hughes reported a drop in the rig count and the weekly U.S. Commodity Futures Trading Commission report showed U.S. hedge funds and money managers have already starting reducing their long positions.

West Texas Intermediate Crude Oil
Daily October West Texas Intermediate Crude Oil

Technical Analysis

The main trend is up according to the daily swing chart. Momentum is also trending higher with the formation of Thursday’s closing price reversal bottom.

The main range is $50.51 to $46.62. Its retracement zone at $48.57 to $49.02 is currently being tested. Trader reaction to this zone will determine the near-term direction of the market. Aggressive counter-trend sellers are going to try to stop the rally in an attempt to form a potentially bearish secondary lower top.

Buyers are going to try to drive the market through the range in an effort to make $46.62 a new secondary higher bottom.

Forecast

Based on the current price at $48.73 and the earlier price action, the direction of the market is likely to be determined by trader reaction to the Fibonacci level at $49.02 and the 50% level at $48.57. Inside this range are a pair of Gann angles at $48.62 and $$48.76.

A move over $48.76 will be the first sign of buyers. Overtaking the Fib level at $49.02 will indicate the buying is getting stronger. This could trigger an acceleration into a downtrending angle at $49.64.

A sustained trade under $48.62 will be the first sign of sellers. This could drive the market into the 50% level at $48.57.

If $48.57 fails as support then we could see an acceleration to the downside with the next target angle coming in at $47.62.

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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