Crude Oil Price Update – Strong Uptrend Overriding Weak ‘Overbought’ Oscillator Signals
US West Texas Intermediate crude oil futures closed higher on Thursday in a lackluster but two-sided trade. The market traded mostly lower earlier in the day on concerns about a new variant of COVID-19, but rebounded mid-session after a trade deal was reached between the UK and the European Union, propping up the global economic outlook.
On Thursday, February, WTI crude was at $ 48.30, up $ 0.18, or + 0.37%.
Britain signed a tight Brexit trade deal with the European Union just seven days before exiting one of the world's largest trading blocs in its most significant global shift since losing empire. Crude oil traders hope the new deal will help boost demand once the pandemic has ended and conditions return to normal.
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Daily February WTI crude oil
Daily swing chart technical analysis
The main trend is up according to the daily swing chart. A trade above USD 49.43 signals a resumption of the uptrend. The main trend will change to a $ 46.16 drop in trade.
The small range is between $ 49.43 and $ 46.16. The 50% level at $ 47.80 was supported on Thursday. This helped create the intraday upside tilt.
The main support is the long-term Fibonacci level at $ 46.04. Taking this level out doesn't mean the start of a long-term downtrend, but it will be a strong indication that the sell is bigger than the buy at the current price level.
Short term outlook
What can we really say other than buyers trying to validate the old adage that specs precede basics.
The hedge funds are long and the bullish speculators have taken the sharp breaks while ignoring any attempt to end this rally with headlines warning of lower demand due to the pandemic.
This week, the government inventory report helped boost prices as traders shook off a new variant of COVID-19 in the UK and shut down air traffic in and out of the country.
Traders paid little attention to the rise in US oil rigs, reporting that OPEC + is poised to increase production by 500,000 barrels a day from Jan. 1, with most of their attention appearing to be on the introduction of the vaccines .
The trend and momentum technical tools indicate a strong upside, but some oscillators are signaling overbought conditions. I like to follow the trend. The overbought oscillators are random. In my book, overbought means that buyers have stopped buying. This does not mean that a line has reached a level close to 100.
The market will stop rising when buyers stop buyers and sellers take control. Trade the trend until proven otherwise. The trend is changing down, hovering around $ 46.16.
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This article was originally published on FX Empire
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In this article
CL = F.
SI = F.
ZI = F.
NG = F.
GC = F.
ZG = F.
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