Oil price charts: bounce is likely now
Oil prices are down almost 25 percent from their highs reached in early October, followed by huge sell-off. Prices attempted to recover last week but another selling rout this week send them down due to growing concerns about oversupply.
Despite steep downward trend,I believe prices are set to regain ground very soon, probably already within this week. The major cause for this could be expectedOPEC/non-OPEC meeting on December 6-7, at which producing countries may agree new production cuts to stop the price decline.
Weekly chart analyses clearly indicate the price has already descended to the strong support levels that are capable to sustain. This is 52.30 dynamic support cluster and historically it was strong to contain price falls repeatedly. I think the bounce is very likely.
Of course, support levels are quite thick on weekly charts and in no way it is a precise science, so assume levels as is shown plus/minus 100 points or so. Therefore, scaling in trade entry on several levels is essential. I will buy at current levels and also additional longs at 52.00 and 51.50.
Looking at H4 charts the price is also oversold and price line stretched, in the meantime visibly strong supports are 56.55, 58.50 and 61.80. Any meaningful bounce in price will face serious barriers at these resistance levels – expect repeated tests and failures. The same levels are good for tactical shorts, but I repeat – price at current levels looks like bottom, so be careful with shorts.
Have a nice day !