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WTI Crude Oil: US oil reserves may shrink again


Scenario
Timeframe Weekly
Recommendation BUY STOP
Entry Point 49.20
Take Profit 50.00, 51.60
Stop Loss 48.70
Key Levels 46.20, 46.95, 47.80, 48.00, 50.00, 51.60
Alternative scenario
Recommendation SELL STOP
Entry Point 48.50
Take Profit 47.80, 46.95
Stop Loss 49.00
Key Levels 46.20, 46.95, 47.80, 48.00, 50.00, 51.60
Current trend
During the week WTI oil has been trading within the range of 50.00-48.80 between the gatherings of Fibonacci corrections. The attempt of prices correction after the OPEC meeting in Vienna was not successful yet, and currently the price is testing the lower border of the range (48.80).
Generally, the fundamental picture is not changing. World oil reserves are reducing quite slowly, while US LTO manufacturers increase output volumes.
Today investors are waiting for another report by API, and on Thursday – by EIA. Experts consulted by Bloomberg expect the volume of US oil reserves to further reduce by 0.513 mln barrels which may cause negative market correction on the generally negative background.
Support and resistance
Technically the price is testing the gathering of Fibonacci corrections and the lower line of Bollinger Bands at 48.80. Moreover, this is the area of the lower line of Bollinger Bands for D1. If the price consolidates below this mark, it may continue to fall to 47.80, 46.95 and 46.20. Otherwise the price may return to the upper border of the range at 50.00 and climb higher to 51.60.
Support levels: 48.00, 47.80, 46.95, 46.20.
Resistance levels: 50.00, 51.60.

Trading tips
In the current situation long positions may be opened if the price breaks back through the level of 48.80 from 49.20 with targets at 50.00, 51.60 and stop-loss at 48.70.
If the price consolidates below the lower line of Bollinger Bands, short positions with targets at 47.80, 46.95 and stop-loss at 49.00 will become relevant.

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