Oil rips 32% in eight weeks – WTI breaking levels
Crude Oil Technical Forecasts: Short-Term WTI Trade Levels
- Crude oil Updated Technical Trade Levels – Daily and Intraday Charts
- WTI rally expands to key / constructive resistance targets above 75
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Oil prices are trying to mark a sixth straight daily advance in a wider eight-week rally as the breakout of WTI hits new seven-year highs. While the broader outlook remains constructive, the immediate advance could be vulnerable in the coming days as price stretches towards resistance to the confluent uptrend. It is the updated targets and invalidation levels that rely on the oil price data sheets. Review my last Strategy webinar for an in-depth analysis of this crude oil price configuration and more.
Crude Oil Price Chart – WTI Daily
Graphic prepared by Michel Boutros, technical strategist; Crude Oil (WTI) on Tradingview
Technical perspectives: Last month Crude Oil Price Outlook we noted that the WTI was “testing the initial resistance targets and keeping the focus on top while being above the monthly open. From a business perspective, look for downside exhaustion before 70.42 IF the price goes up on this stretch – ultimately the focus is on breaking / closing above 74.91 to maintain the long viable bias towards the upper parallels. Oil briefly recorded an intraday low at 69.38 before rebounding sharply from the 100-day moving average / channel support with the following rally closing the month just above the 2011 low of 74.91 – the October opening registered at 75.09 and we will reserve this threshold as our widest bullish invalidation level.
Crude prices are now up 32% from August lows, with prices extending towards confluent resistance this week at 81.90-82.84– a region defined by 1.618% Fibonacci extended August lead and 2011 low week close. Risk of upper exhaustion in this area as trend matures. Daily assistance is based on trend line confluence with a higher breach from here exhibiting a longer term trend resistance at the low of 2013 around ~85.61 – look for a more important reaction IF reached.
Crude Oil Price Table – WTI 120min
Remarks: Closer look at crude price action shows WTI is carving out a definite week aperture range just below the resistance at 81.90-82.84. Weekly-open Support rests at 74.50 and is supported by the highest parallel lower / 2018 to 76.87– look for downward exhaustion before this zone IF the price actually rises on this section. In the end, a break below the monthly opening / the low of 2011 / the close of the week high of 2018 to 74.26-75.09 would be needed to refocus attention on the decline in WTI.
At the end of the line : The rally in crude oil may be vulnerable in the near term as long as it is below this technical resistance pivot. From a business perspective, a good area to reduce long exposures / increase protective stops – losses need to be held in this channel for the long bias to remain viable with a higher breach likely to fuel another rally accelerated towards the key resistance at the upper parallels. Review my last Weekly Crude Oil Price Outlook to take a closer look at longer-term technical trading levels.
For a full description of Michael’s trading strategy, see his Fundamentals of Technical Analysis Series on Bbuild a Tranking Sstrategy
Crude Oil Traders Sentiment – WTI Price Chart
- A summary of Sentiment of IG customers shows traders are net short on crude oil – the ratio stands at -1.59 (38.56% of traders are long) – typically bullish reading
- Long positions are 7.71% more than yesterday and 0.33% more than last week
- Short positions are5.16% more than yesterday and 27.33% more than last week
- We generally take a contrarian view of crowd sentiment, and the fact that traders are net short suggests that US oil and crude prices may continue to rise. Traders are less sharp shorts than yesterday but sharper shorts than last week. The combination of the current positioning of retailers and recent changes gives us another mixed US Oil – Crude bias from a feeling point of view.
Active technical configurations
— Written by Michel Boutros, Technical strategist with DailyFX
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