August 14, 2022
  • August 14, 2022

Soaring Crude – Bulls Eye Major Breakout At May High

By on May 12, 2021 0

Crude Oil Technical Forecasts: Weekly WTI Trade Levels

Oil prices jumped more than 4.5% from weekly lows, with WTI threatening a major breakout of resistance in the monthly range / 2019 highs. We are looking for a reaction here with a breach / close here. above necessary for the immediate advance to remain viable in the days to come. It is the updated goals and invalidation levels that rely on the oil price weekly chart. See again my last Strategy webinar for an in-depth analysis of this crude oil price configuration and more.

Crude Oil Price Chart – Daily WTI

Graphic prepared by Michael boutros, Technical strategist; Crude Oil (WTI) on Tradingview

Technical perspectives: In the last month Crude Oil Price Outlook we noted that WTI was approaching confluence resistance near handle 64 and be on the lookout, “for a possible inflection off that area with a breach / fence above necessary to keep the immediate advance viable.” towards the end of the high week 2019 / high close 2021 to 66.14 / 26. Crude prices peaked at 64.35 before posting a lower off-day reversal with the pullback rebounding from confluence support at the end of April.

Crude prices have increased by more than 10% this low with the key advance now probe resistance at 66.14 / 26– look for a reaction here. A breach / upper close would be required to keep the immediate long bias viable towards goals subsequent to the 100% extension / 2021 annual high at 67.72 / 94 and the 61.8% Fibonacci retracement of the decline from 2011 to 70.95. Daily key Support / bullish invalidation rest with 38.2% retracement / monthly opening at 63.10 / 45.

Crude Oil Price Chart – WTI 120min

Crude Oil Price Chart - WTI 120min - USOil Trade Outlook - CL Technical Forecast

Notes: A closer look at the crude price action shows that WTI is trading within the limits of a fork formation extending the March / April low with prices turning this week just ahead of the lower parallels. An escape from the weekly aperture range Wednesday fueled a rally to key resistance during 2019 week high / day close high / 2019 high to 66.15 / 57– look for a reaction in this area with a close above necessary for the rally to remain viable at the end of the week. Initial care 65.56 supported by short term bullish invalidation at the annual closing of the reversal at 64.65. Ultimately a break / close below 63.10 would be necessary to bring the bears under control.

At the end of the line: The rally in crude oil is now testing key resistance in the May opening highs. From a business perspective, a good region to reduce long exposure / increase protective stops – losses should be limited to 64.65. IF the price is indeed heading higher with a close above 66.57 needed to fuel the next higher stage. Keep in mind that this is a major resistance area that we’ve been tracking for months now – a breach could fuel another accelerated run for the bulls – stay nimble here. Review my last Weekly Crude Oil Price Outlook for 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 Bbuilding a Tradiant Sstrategy

Crude Oil Traders Sentiment – WTI Price Chart

Crude Oil Traders Sentiment - WTI Price Chart - USOil Retail Positioning - CL Technical Forecasts

  • A summary of IG customer sentiment shows traders are net crude oil long – the ratio is +1.20 (54.60% of traders are long) – usually bearish reading
  • Long positions are 11.25% less than yesterday and 13.31% more than last week
  • Short positions are9.57% more than yesterday and 24.91% less than last week
  • We generally take a vexing view of crowd sentiment, and the fact that traders are net long suggests that US oil and crude prices may continue to decline. Still, traders are shorter than yesterday, but longer than last week and the combination of current positioning and recent changes gives us another mixed bias on US oil and crude. feeling point of view.

Active technical configurations

— Written by Michael boutros, Technical strategist with DailyFX

To pursue Michael on Twitter @MBForex

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