WTI Crude Oil – possible reversal
Crude oil had impressive fall yesterday after headlines demonstrating sudden rise in EIA inventories. Following the global risk-off mood and the USD strength, it was quite natural to watch WTI price plummeting. And then Thursday early morning it turned out to become a sudden bounce as price was rejected from the key supports at around 50.80.
It looks that despite prevailing pessimistic fundamentals, the crude oil is following technicals now. We believe charts are overly stretched and ready for bullish correction. Besides, the 50.80 is a close reflection of extremely strong ascending support cluster on a weekly chart. Therefore this bounce is indeed is logical.
While political declarations and funny tweets might affect further price action, I believe crude price is preparing for some meaningful bounce.
Hence, I would bet on tactical long, considering the area below 50.80 as a convenient stop placement zone.
There are strong resistance levels all the way up. At the moment, price has been rejected from 53.25 level and we will wait for the break above this cluster to enter tactical long. If it breaks, then 55.05 and especially 56.40 both are strong resistances capable to reverse the price. Set stops below 50.80 but beware of the fakey’s and repeated tests in this area.
Have a nice day !