December 3, 2022
  • December 3, 2022

WTI Rally Stalls – Rollback Levels

By on June 14, 2022 0

Crude Oil Technical Forecast: WTI Short-Term Trading Levels

  • Crude oil updated technical trading levels – Daily and intraday charts
  • WTI price breakout stalls ahead of close of 2022 high – risk of pullback in uptrend
  • New to the oil business? Get started with this free How to Trade Oil-Beginner’s Guide

Crude oil prices jumped more than 33% from April lows, with WTI now a striking distance from yearly highs. While the broader outlook remains constructive, the immediate advance may be vulnerable here in the near term and we are looking for a breakout of the weekly opening range for guidance. It’s the updated targets and invalidation levels that count on the oil price weekly technical chart. Exam my last Strategy Webinar for a detailed analysis of this technical crude oil price setup and more.

Crude Oil Price Chart – WTI Daily

Chart prepared by Michel Boutrostechnical strategist; Crude Oil (WTI) on Tradingview

Technical outlook: Crude oil prices are trading within an ascending channel formation, with prices turning away from the upper parallel this week. The accent remains constructive as long as it is above the confluence Support at 114.80-115.47– a region defined by the 2011 high, June opening target and 61.8% Fibonacci retracement of the March decline. An upper breach/close above the annual high day close at 124.76 would be needed to mark the resumption of the broader uptrend towards the close of the 2008 week high / March high at 129.29/41. Later upper objectives were aimed at the upper parallel (currently near ~132) and the close of the highest day of 2008 at 138.74.

Crude Oil Price Chart – WTI 240min

Crude Oil Price Chart - WTI 240min - USOil Trade Outlook - CL Short Term Trade Forecast

Remarks: A closer look at the oil price action shows WTI consolidating within an ascending wedge formation, with the weekly opening range taking shape just below 124.76. resistance area. A break below the weekly range lows would look to challenge key support at 114.80-115.47 – look for a bigger reaction at this IF spot reached with a close below needed to suggest a bigger pullback could be in progress to the lows from June to 111.21 and the lower parallels. Wider bullish invalidation now taken to the 61.8% retracement at 104.66.

At the end of the line : The breakout in Crude Oil prices stalls just ahead of the close of the March high and while the broader outlook remains constructive, risk increases here for a pullback in the uptrend below 124.76. From a trading standpoint, a good area to reduce long exposure portions/increase protective stops – losses should be limited to 114.80 IF price indeed heads higher on this stretch. Ultimately, a larger pullback can provide more favorable opportunities closer to trend support with a close above the monthly highs needed to signal recovery. Review my latest Weekly Crude Oil Price Forecast for a closer look at WTI’s long-term technical trading levels.

For a full analysis of Michael’s trading strategy, see his Fundamentals of Technical Analysis Series on Bbuild a Jrading Sstrategy

Crude Oil Traders Sentiment – WTI Price Chart

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

  • A summary of IG Customer Sentiment shows traders are net short Crude Oil – the ratio stands at -2.47 (28.82% of traders are long) – generally bullishreading
  • Long positions are16.51% less than yesterday and 12.48% less than last week
  • Short positions are1.20% less than yesterday and 21.12% more than last week
  • We generally take a contrary view to the sentiment of the crowds, and the fact that traders are net short suggests that US crude oil prices may continue to rise. Traders are even sharper than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger contrarian trading bias Oil – US Crude-bullish feeling point of view.

Active technical configurations

— Written by Michel BoutrosTechnical Strategist at DailyFX

Follow Michael on Twitter @MBForex

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