Crude Oil Update – In Holding Pattern Ahead of EIA Inventories Report

March WTI Crude Oil futures are trading higher and inside yesterday’s range. The chart pattern suggests investor indecision and impending volatility. The news is still mixed with bullish traders reacting to reports of compliance with OPEC’s plan to curtail production. Bearish traders believe the OPEC deal is weak and that increased U.S. production will offset any of OPEC’s benefits.

Technical Analysis

The main trend is down according to the daily chart. A trade through the main bottom at $51.59 will signal a resumption of the downtrend.

On the downside, the major retracement zone is $51.43 to $50.29. A long-term uptrending angle passes through this zone at $50.89, making it a valid target also.

On the upside, the first retracement zone target is $52.63 to $52.00. This is followed by $53.89 to $54.43.

Forecast

Based on the current price at $52.38, the direction of the market today is being controlled by a short-term uptrending angle at $52.34.

A sustained move under $52.34 will signal the presence of sellers. This could trigger a move into the next uptrending Gann angle at $51.97. This is followed by the main bottom at $51.59 and the major 50% level at $51.43.

Overcoming and holding above $52.34 will indicate the presence of buyers. The next two targets are $52.63 and $52.96. This is the trigger point for an acceleration into a long-term downtrending angle at $53.43.

Despite the weakness this week, crude oil is still range bound so I expect to see a technical bounce on a test of the major 50% level at $51.43.