Crude Oil: further sell-off or bear-trap ?
In my previous (Nov 21st) WTI price review, I have recommended traders to start thinking about entering longs at 51.50,-51.50 support area. Since then price went down to 50.40 and bounced a bit and still playing in this area.
What kind of factors do we have today? Oversupply worries continue to push oil price down and it looks like to test the 50.50 area today again. Global economics slowdown concerns and US crude output levels at record high. Then, markets are very cautious ahead of the crucial Trump-Xi meeting later this week. Among other factors, the OPEC meeting likely to be held today and another crucial mover is US API weekly crude stocks data.
Fundamentals aside, let’s have a looks at weekly and daily charts. Weekly charts indicate the price bounce is more than likely. As I projected before, the dynamic support cluster which is now at 52.20 will likely to hold and I would bet on bounce from this area.
On a daily chart, everything looks like extremely oversold and it adds another argument for bullish move. I am not looking into crystal ball and trading is never a precise science but I think todays’ price action will look like typical “bears trap”. Price may spike down on news and then fast reversal is likely. In any case, bounce at these levels are more than likely and I will buy. Targets are 52.90 and 54.60.
Have a nice day !