Fundamentals: "Crude oil prices settled higher on Thursday as ongoing Opec and non-Opec output cuts, fuelled expectations that global oil market rebalancing was underway. Saudi Arabia continued to cut oil output as inventories declined significantly in October, Saudi Energy Minister Khalid Al-Falih said Thursday while compliance with the Opec-led accord to curb output had been “excellent.” Falih also expressed a desire to continue with output curbs, saying that Opec should work to ensure stockpiles continue to fall beyond March. Opec is slated to next meet at its headquarters in Vienna on Nov. 30."
Yesterday, in my technical analysis I have mentioned the possible pullback levels to use as buying opportunities.
“On H4 chart, we see that the price is trying move lower channel of Bollinger Bands. And it is below Tenkansen.This is telling us that we may see a decline in the price towards 53.90 and 53.50.Traders who like intraday trading may try a short entry targeting above mentioned levels.We will just try to use those levels as buying opportunities.”
Price pulled back to 53.90 and moved upward and tested 55 USD. This was a 100 pips profit opportunity intraday.
We are still LONG on Crude Oil and our first target is 56.30 with the break out of 55 USD.
On the daily chart, the picture is quite clear. The trend line resistance became a support. Even this is enough by itself to understand the momentum of the bullish move. However, 55.10 is standing as a strong resistance. This is a psychological level and break-out of this resistance will accelerate the upwards move.
For intraday trading; H4 Chart :
Stochastic Oscillator is not in the overbought zone.54.30 and 53.90 are the possible pullback levels.
On the upper side, 55.10 and 55.40 are the first targets. I want to add one more chart for serious Crude Oil Traders.
The monthly chart of Crude Oil. WTI falls down from 140 to 30 USD in six months. And we have trend line as shown on the chart. A monthly closing above the trend line may carry the price 64-65 USD. This is the LONG term part of the story. Just wanted to give you an idea.
I am presuming you saw the close of the Market on Friday? What we're seeing here in my opinion is classic shorting volatility, but doing that implicitly through Financial Engineering. Over the last couple of weeks especially, when the price of oil retraced, the buying has been so aggressive. Why? Because the buyers can afford to be price "in-sensitive" as effectively they are issuing debt (through SWAPS) and using the proceeds to buy back oil. This reduces the supply, pushing prices up (artificially) which then pays back their debt and some...However, there is one caveat here...An artificial bull-run can't go on like this forever, and the dangers of a Hyper-crash become much more of a realistic prospect especially when successive interest rate hikes are triggered to try and curb inflation but that fails to do so, geopolitical tensions heightening etc. When the crash comes, it will be absolutely brutal especially if it goes below 10% of it's value, then it could drop up-to 50%...
Where do you see potential pull-backs to buy oil this week based off the Last Price of WTI on Friday? Optimistically I see a Pull-back to KEY POC of 54.80 region, but realistically I don't think it will go lower than 55.20...
Also something very interesting for you to notice, is how this Friday's price action was very similar to last Friday's price action. This shows that their is market manipulation in place, especially that the BDIY is actually dropping! Lesson, don't short on a Friday for now up until the 30th.
CyrusTrafford
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I might be incorrect in my thinking as I am still new to tracking BDIY, but WTI and BDIY should be positively correlated not negative, hence why it dropping atm confirms the manipulation in the market.
eacemi
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@CyrusTrafford, Simply as it is. I wrote pullbacks towards 54.30 and 53.90. And price pulled back to 54.30 and we used it as buying opportunity. Add Long and ended the week at 55.70. 54.80 will be the pullback level as you wrote.
CyrusTrafford
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@eacemi, Now with the Saudi news taking place this weekend and reports that Oil Storage in Ras Tanura, Saudi Arabia is down a lot over the past 7 days due to an export boost from 6.67 to 8M barrels per day, I actually think the market could gap up quite high on the open tonight. I think if we are lucky we may have a pullback to 55.20 but unfortunately 54.80 (main POC) looks unlikely due to attempted Saudi coup.
eacemi
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@CyrusTrafford, I have had enough profit and I still have enough LONG positions. And I know where to add more :-) My ultimate targets are clear.
Where do you see potential pull-backs to buy oil this week based off the Last Price of WTI on Friday? Optimistically I see a Pull-back to KEY POC of 54.80 region, but realistically I don't think it will go lower than 55.20...
Also something very interesting for you to notice, is how this Friday's price action was very similar to last Friday's price action. This shows that their is market manipulation in place, especially that the BDIY is actually dropping! Lesson, don't short on a Friday for now up until the 30th.