Technical analysis update: WTI oil (25th November 2021)
Updated
USOIL seems to stabilize in range between 75 USD and 79 USD. Currently, it trades around 78 USD; and we are closely watching technical indicators as they continue to point to the bearish condition. Current state of oil coincides with the recent set of bearish news regarding realese of the strategic oil reserves by the U.S. and its allies. We do expect the OPEC to take counter measure in response to this action. We think this will most likely take form of lessening production quotas for OPEC's members. We still think that in long-term price of oil is headed higher. However, in short-term and medium-term ongoing politics between the OPEC and the U.S. create headwinds for further rise in price of oil. Despite that, we expect OPEC's counter measures to bolster bullish case for WTI oil.
WTI oil continuous futures chart and volume:
Volume continues to decrease which suggests that selling pressure cools off.
Other developments in a world thatt are related to oil market:
1. First snow in Europe drags power prices higher.
2. EIA reports that crude oil inventories rose slightly last week with inventories of gasoline falling.
3. UN Nuclear Agency failed to reach agreement with Iran last week.
4. Oil markets take relatively well release of strategic oil reserves.
Technical analysis - daily time frame
RSI is very bearish. MACD is also bearish but it started to show first signs of flattening. Though, it needs to be closely observed for next action in the following days. If it manages to reverse to the upside and cross above 0 points then we will view it as very bullish development. Stochastic remains in bearish area, however, it managed to reverse and it currently points to bullish direction. It also needs to be observed closely in the following days. If it manages to oscillate higher then we will view it as bullish development. DM+ and DM- remain bearish. ADX suggests that prevailing trend is very weak.
Technical analysis - weekly time frame
RSI exhibits divergence in its medium-term structure. We will observe it in the following weeks and we will look for its ability to reverse back into bullish direction. MACD remains in bullish territory, however, it keeps moving sideways (bearish histogram is forming today). DM+ and DM- remain bullish. ADX continues to decline which suggests that trend is weakening.
Divergence in RSI:
Double divergence in RSI is not particularly bullish development. We will observe action of RSI very closely in the following weeks as it flashes warning signs at the moment.
Support and resistance
Major resistance level sits at 85.39 USD while major support level sits at 61.58 USD. Support 1 is at 76.95 USD, Support 2 is at 75.47 USD, Support 3 is at 74.21. These supports act as short-term levels of importance. Additionally, yesterday's high at 79.20 USD acts as immediate resistance. Another important level from psychological standpoint is 80 USD.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as basis for taking any trade action by individual investor. Your own due dilligence is highly advised before entering trade.
WTI oil continuous futures chart and volume:
Volume continues to decrease which suggests that selling pressure cools off.
Other developments in a world thatt are related to oil market:
1. First snow in Europe drags power prices higher.
2. EIA reports that crude oil inventories rose slightly last week with inventories of gasoline falling.
3. UN Nuclear Agency failed to reach agreement with Iran last week.
4. Oil markets take relatively well release of strategic oil reserves.
Technical analysis - daily time frame
RSI is very bearish. MACD is also bearish but it started to show first signs of flattening. Though, it needs to be closely observed for next action in the following days. If it manages to reverse to the upside and cross above 0 points then we will view it as very bullish development. Stochastic remains in bearish area, however, it managed to reverse and it currently points to bullish direction. It also needs to be observed closely in the following days. If it manages to oscillate higher then we will view it as bullish development. DM+ and DM- remain bearish. ADX suggests that prevailing trend is very weak.
Technical analysis - weekly time frame
RSI exhibits divergence in its medium-term structure. We will observe it in the following weeks and we will look for its ability to reverse back into bullish direction. MACD remains in bullish territory, however, it keeps moving sideways (bearish histogram is forming today). DM+ and DM- remain bullish. ADX continues to decline which suggests that trend is weakening.
Divergence in RSI:
Double divergence in RSI is not particularly bullish development. We will observe action of RSI very closely in the following weeks as it flashes warning signs at the moment.
Support and resistance
Major resistance level sits at 85.39 USD while major support level sits at 61.58 USD. Support 1 is at 76.95 USD, Support 2 is at 75.47 USD, Support 3 is at 74.21. These supports act as short-term levels of importance. Additionally, yesterday's high at 79.20 USD acts as immediate resistance. Another important level from psychological standpoint is 80 USD.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as basis for taking any trade action by individual investor. Your own due dilligence is highly advised before entering trade.
Trade active
WTI oil plunged below short-term supports. We think it is likely price will test 72.50 USD pricetag.Note
Idea was updated in the following post:
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