The market goes down from $ 65
It is a market that you should buy if there is a dip.
The West Texas mid-market crude oil market fell quite hard in Friday’s trading session, showing signs of depleting to the $ 65 level. The $ 65 level is one area where we’ve seen selling pressure before, so it makes sense that we looked for it again in the last 24 hours. That being said, the trend is still up, and I could even argue for a little ascending triangle trying to form here. At the very least, we could talk about a potential upward channel over the past couple of months.
Under the potential channel we also have the 50 day EMA support, so it is likely that we would continue to see buyers based on this technical indicator. We’ve been in an uptrend for some time, although we’ve had a nice pullback recently, which suggests there may be some value in the market. Therefore, I believe that if we see a support candlestick or some type of bullish impulse candlestick, we can go long.
If we fall below the 50 day EMA, it is very likely that we could turn to the 200 day EMA. However, this is the least likely scenario as most traders play “reopen trade” in the oil market. It is also helpful that OPEC + and British Petroleum both suggested that crude oil demand should continue to grow 6 million barrels per day for the remainder of the year, despite India, Brazil and Japan are all suffering from a resurgence of the coronavirus. Most of the increase in demand they see is in countries like the United States, China, the European Union, and the United Kingdom.
This is a market you should buy when it drains, as if Friday was relatively difficult, the reality is that we tested a major resistance barrier, and it was at the end of the month that people were taking advantage of what had been some really big gains to report back to clients . Now that this is no longer the case, people will start to look at the long term trend.