Bottom line: WTI Crude bullish structure would remain intact until prices stay above 19.25 levels. The corrective drop might be completed as bulls prepare to push towards 35.00.
Fundamental Outlook:
Oil prices still remain under pressure and closed around 3.5% lower yesterday at 22.36. The fundamental effects over the OPEC meet and the end to price war between Russia and Saudi Arabia are yet to be seen. A production cut of over 10 million barrels per day was agreed upon last week. Oil trades around 22.50 at this point in writing and might drop to 21.30 before support comes in.
Most Global Indices have risen over 20% since their respective March lows as Central Banks have collectively made efforts to boost sentiment. However, the decline in major indices might be far from over as countries face extended lockdown due to COVID-19 pandemic.
Gold prices surge to new yearly highs as the metal hits $1725 on Monday. It is seen to be trading around $1714 at this point in writing and potential remains to test $1750.
Technical Analysis:
WTI Crude bulls remain poised to take control back and push prices higher towards 35.00 and 45.00 levels going forward. High probability remains that a meaningful bottom might be in place at 19.25, and a series of higher highs and higher lows are expected.
The rally between 19.25 and 29.11 has unfolded as an impulse. Also note, the subsequent drop has been corrective and retraced 61.8% of the previous rally. It is quite possible that WTI Crude might have found support around 22.00 levels.
Immediate price resistance is seen at 24.00 and a break higher would confirm resumption of uptrend. Ideally prices should above the 19.25 mark and push higher towards 35.00 as rally progresses.
Most traders might be willing to initiate long positions at current price (22.60/70), with stop around 19.00 and potential targets above 35.00 levels respectively.
Prepared by
Harsh Japee, Technical Analyst.
WTI Crude Chart
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