It looks like WTI Crude Oil futures have broken their uptrend today, after hitting $43 per barrel. In the last 10 days, since 1st Nov, the WTI Crude Oil futures have moved up from 34 to 43, nearly 25% gain, which would be amplified 5-10X when we trade with futures.
As per the above chart, the uptrend clearly breaks below 41, so 41 should be the stop loss for all long trades. As mentioned in previous posts, we can stay long above 40, for targets of 44-45, and then 49-50 per barrel. There are two level of Crude Oil Support, one at 39-40 level and other at 34-35 level.
Crude Oil futures are in uptrend currently, and our Crude Oil trading strategy is to buy on corrections and take profit on rallies. The long trades from 37 to 40 has been a reliable trade, and we have done it thrice in last 2 months.
Crude Oil Price Outlook: We should be prepared to see constant readjustment of crude oil prices between $35 and $45 over next 3 months, because the global economic growth is still weak, and crude oil will keep facing supply pressure as soon as it goes towards 45-50 level.
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Crude Oil futures traded lower during the Asian session at 51.95, tracking losses in financial markets on concerns over the economic impact of the coronavirus outbreak in China and its effect on oil demand. The number of new coronavirus infections in mainland China fell below 2,000 on Tuesday for the first time since January, Chinese health officials said.
The International Energy Agency said last week that the coronavirus was set to cause oil demand to fall by 435,000 barrels per day year-on-year in the first quarter, in what would be the first quarterly drop since the financial crisis in 2009.
Investors are also anticipating that the OPEC and its allies, including Russia, will approve a proposal to deepen production cuts to support prices. Oil output from Libya has fallen sharply because of a blockade of ports and oil fields by eastern-based commander Khalifa Haftar. Libya’s National Oil Corporation(NOC) said on Monday that oil production was at 135,745 barrels per day Monday, compared with 1.2 million bpd before the stoppage.
Indicator – Signal
SMA 20 Sell
SMA 50 Sell
SMA 100 Buy
Support & Resistance Table
Resistance 2 52.75 Daily R2
Resistance 1 52.35 Daily R1
Support 1 51.56 Daily S1
Support 2 51.18 Daily S2