WTI Crude Oil Forecast: Hovering Over 50-Day EMA

Christopher Lewis

We are in the last couple days of the year and only the truly foolish jump into the markets with big positions.

The West Texas Intermediate Crude Oil market went gone back and forth on Wednesday, as it looks like traders are trying to figure out how to end the year. We are sitting above the 50 day EMA, and currently it seems to be offering support as you would expect. Recently, we have seen a nice rally based upon the fact that omicron may not necessarily shut down the economy like so many crude oil traders had been fearing. If that is going to be the case, then the idea is that demand will continue to pick up.

If we do break down below the 50 day EMA, there is still a ton of supportive action underneath that should keep this market somewhat afloat. It is because of this that I am essentially in “buy on the dip” mode when it comes to this market, because I do think that we have further to go to the upside. That being said, we are in the last couple days of the year and only the truly foolish jump into the markets with big positions. In fact, I am hoping for a couple of days’ worth of weakness that I can start buying into next week. As far as putting on a position between now and then, I doubt I will do it, unless of course we suddenly take off again.

When it comes to this time year, illiquidity can be a major problem. That is especially true in this contract because most of you are probably trading CFD markets. If that is going to be the case, you need to be especially careful and use very small positions. Quite frankly, it is not worth the risk to me but I recognize that some people want to trade every day. Regardless, the one thing that I will not be doing is shorting this market anytime soon; it is far too strong and the nasty move to the upside clearly seems to have a certain amount of staying power and momentum built into it. Longer term, I expect a break above the $80 level sometime in the next week or two while crude oil eventually goes looking towards the highs again.

WTI Crude Oil

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

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