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Crude Oil Weekly Chart

Crude Oil Price Chart - Weekly Timeframe

Technical Outlook: Last month we highlighted that a multi-month consolidation break was imminent[2] in crude prices with a topside breach favored. Oil broke out into the close of the year with the advance now eyeing near-term confluence resistance at 64.78- this level is defined by the 100% extension of the 2016 advance and converges on the median-line of the ascending pitchfork formation we’ve been tracking for months now.

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Crude Oil Daily Chart

Crude Oil Price Chart - Daily Timeframe

The daily chart further highlights this region with near-term embedded ascending channel resistance also converging on the threhshold. Note that daily & weekly momentum remain in overbought territory and we’ll be looking for the break back below 70 to suggest a near-term correction is underway. A topside breach above this mark keeps the long-bias in play with such a scenario targeting the 2010 low at 67.17 backed by the 50% retracement at 70.41.

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Crude Oil 240min Chart

Crude Oil Price Chart - 240min Timeframe

Notes: Interim support rests at 63.23 (the measured consolidation target) with a break below the 2015 highs at 62.56 / trendline support needed to shift the medium-term focus lower. Bottom line: The immediate advance is at risk while below 64.78 but the broader focus remains constructive while above 59.12(bullish invalidation). From a trading standpoint we’re on the lookout for a pullback to ultimately offer more favorable long-entries while within the confines of the broader bullish formation.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis[6] mini-series

Crude Oil IG Client Sentiment
  • A summary of IG Client Sentiment[7]shows traders are net-short Crude Oil- the ratio stands at -1.66 (37.6% of traders are long) – bullishreading
  • Retail has remained net-short since Dec 19; price has moved 12.3% higher since then
  • Long positions are 0.8% higher than yesterday and 7.0% higher from last week
  • Short positions are 0.4% lower than yesterday and 6.9% higher from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests Oil - US Crude prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current Oil - US Crude price trend may soon reverse lower despite the fact traders remain net-short.

See how shifts in Crude retail positioning are impacting trend- Click here to learn more about sentiment![8]

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Other Setups in Play

- Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex[9] or contact him at

References

  1. ^ SIGN UP HERE (forms.aweber.com)
  2. ^ multi-month consolidation break was imminent (www.dailyfx.com)
  3. ^ New to Forex (www.dailyfx.com)
  4. ^ Free Beginners Guide (www.dailyfx.com)
  5. ^ Avoid these Mistakes in your trading (www.dailyfx.com)
  6. ^ Foundations of Technical Analysis (www.dailyfx.com)
  7. ^ IG Client Sentiment (www.dailyfx.com)
  8. ^ Click here to learn more about sentiment! (www.dailyfx.com)
  9. ^ @MBForex (twitter.com)

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