Crude Oil Technical Analysis for June 16, 2016
The WTI Crude oil market bounced slightly during the day on Wednesday, as it looks like we are ready to continue the uptrend. With this, it’s very likely that the buyers will return and try to break back above the $50 level, and then possibly even higher than that. With this being the case, pullbacks should be thought of as potential value, as there is a lot of noise between current levels in the $46 level. With that being the case, it seems that the buyers are still very much in control, and that the crude oil markets will continue to grind away to the upside. With that being said, it’s not until we break down below the $46 level that I think we would be in any type of trouble, and truthfully it’s not until we break down below the $43 level that the trend changes in my opinion.
Brent markets went back and forth during the day on Wednesday, as we bang around just below the $50 level. There is a significant amount of support below and extending all the way to at least the $48 level, and then below there at the $44 level. With that in mind, I think that pullbacks will offer buying opportunities and supportive candles of course will attract buyers as the market could continue to go much higher given enough time. Regardless though, I would anticipate that there is going to be a significant amount of volatility so ultimately you’re going to have to be able to deal with that.If we do break down from here, is going to be a fight until we get to the $44 level. Once we break down below there we would have significantly snapped a massive trend line, and that of course would be a very negative sign. The markets then would find themselves drifting down to the $38 level, and then possibly much lower. It should be noted that last week’s candle ended up being a shooting star which of course is very negative.
In Other View Point – Oil under pressure, eyeing to test $47.00 support
WTI crude oil extended its sharp slide for sixth consecutive day and is now moving closer to $47.00 mark as looming ‘Brexit’ worries coupled with disappointing US crude oil data has kept bulls on the back-foot.
Adding to this, global risk aversion seems to drive investors away from riskier asset class like equities and commodities, like oil. Currently trading below the mid-point of $48.00-47.00 handle, the black gold earlier on Thursday dropped to test its lowest level since May 19.
On Wednesday, oil fell after the EIA reported shrinkage in US crude oil inventories, but was less than 2.3 million barrel fall expected.
The commodity has also been dragged lower by uncertainty surrounding the June 23 UK-EU referendum, which has been supportive for the safe-haven appeal of the greenback and has kept commodities suppressed.
Technical levels to watch
Weakness below a previous strong resistance, now turned immediate support, near $47.00 handle seems to accelerate the fall towards its next major support near $46.00 round figure mark with intermediate support near $46.70-75 zone.
On the upside, $47.50-60 area now seems to act as immediate resistance, above which the commodity seems all set to reclaim $48.00 mark and head towards its next major resistance near $48.60-65 area.
In Other View Point – Crude(CL1!)-Update: Further Downside To Be Seen?
Crude broke down to the lows, and broke the sideways wedge (See related ideas) Crude is still going decisively lower will the move continue. If you shorted with me on previous idea holding position is a good idea, worth keeping an eye on this one for a set up this week. Hope you have a tested trading strategy to trade this move when it starts.