Crude Oil Futures are showing clear signs of bottoming out in this current fall. Current price is $52.86. Aggressive traders can go long even at current price for Target 55 and Stop loss 50. A clear bullish signal will come above $55, and crude oil can go upto $60 before facing fresh resistance and selling pressure. Observe the 50 day simple moving average (SMA), which is currently at $60.50 and its sloping downwards gradually. Once crude oil starts trading above its 50 day SMA, a fresh upmove can take it to $72. Long term support levels are around $45 on the lower side. Therefore, $50 is the absolute stop loss for any long trade as of now.
Crude Oil (WTI) is bearish at current price $55. It is safe for long trade only above 60, or from a much lower level like 45. Below 60, is constant weakness. Near term downside targets are 52 and 50. A weekly closing above 60 is needed for crude to become bullish again. 43-45 is a good long term support level, and that’s a good buying zone for reversal to 60.
Crude Oil is facing multiple demand-supply factors. The most important factor is the slow global GDP growth, and the further downside risk from US-China trade war, on global economy. The periodic political attempts to create supply constraints are not working, because the market has realized that there is enough supply at the $50-60 level. This is also a lesson for the crude oil producers not jack up prices at every opportunity, otherwise the consequent falls will be even sharper.
We don’t need rock bottom crude prices – that’s good for nobody in longer term, in an interlinked global economy. But as long as we have crude between $50-60, it should be okay and supportive for global GDP growth.
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