Crude Oil Price Update – WTI Trend Changed Back Down on Move Through $49.60

February WTI crude oil is now down 10 trading sessions from its last main top at $54.77. This puts it inside the window of time for a closing price reversal bottom. The formation of this chart pattern won’t mean the trend is changing to up, but it could lead to a two to three day counter-trend rally.
James Hyerczyk
Crude Oil
Crude Oil

U.S. West Texas Intermediate crude oil futures are under pressure for a third straight session on Tuesday on renewed concerns over a supply glut. The catalysts are reports of inventory builds and forecasts of record shale output in the United States. Worries over future demand amid weakening global economic growth also weighed on prices. Monday’s steep sell-off in the U.S. equity markets also contributed to the weak sentiment.

At 0819 GMT, February WTI crude oil is trading $49.22, down $0.98 or -1.98%.

Daily February WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on Monday when sellers took out the previous main bottom at $49.60. The next downside target is the August 16, 2017 main bottom at $47.97. The new main trend top is $54.77.

The minor trend is also down. It turned down when sellers took out $50.60. It was reaffirmed when $50.31 and $49.60 failed as support. The new minor top is $53.50, followed by $54.44 and $54.77.

The current range is $54.77 to $48.83. Its retracement zone at $51.80 to $52.50 is new resistance.

Daily Swing Chart Technical Forecast

February WTI crude oil is now down 10 trading sessions from its last main top at $54.77. This puts it inside the window of time for a closing price reversal bottom. The formation of this chart pattern won’t mean the trend is changing to up, but it could lead to a two to three day counter-trend rally.

Since the market has already posted a lower-low, the key number to watch today is yesterday’s close at $50.20.

Bullish Scenario

Recovering $50.20 will indicate the buying is greater than the selling at current price levels. This will also put the market in a position to post a closing price reversal bottom. This will occur on a close above this level. If the chart pattern is formed, the market could retrace to at least $51.80 within the next two to three sessions.

Bearish Scenario

A sustained move under $50.20 will signal that the market is currently in the strong hands of the sellers. Taking out $48.83 will indicate the selling is getting stronger. If this move creates enough downside momentum then look for the selling to extend into the August 16, 2017 main bottom at $47.97.

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