WTI Crude Oil Forecast: Price Pierces Major Uptrend Line

Christopher Lewis

I do believe that it is probably easier to break down than it is to have a sustainable rally at this point, but it is possible that we will get some type of turnaround.

The West Texas Intermediate Crude Oil market fell on Monday to pierce a significant uptrend line. By doing so, the market looks very likely to continue going lower, especially if we break down below the lows of the Monday session because it would show even more continuation of the downward pressure. It is also worth noting that the 50-day EMA sits just above the last couple of candlesticks, so it certainly makes sense that we would continue to see downward pressure.

Furthermore, you can see that structurally we have been making lower highs along the way, and now we are getting close to making a very significant “lower low.” If that is going to be the case, the $90 level will be targeted, and then perhaps even lower than that. If we break down below the $90 level, then I think it is probably only a matter of time before we go looking to reach the 200-day EMA.

Alternatively, if we were to turn around and break to the upside, the $104 level would have to be overcome on a daily close. If that were to happen, then it is likely that we could go looking to the $110 level after that, which is a significant previous area, and an area where we had seen a bit of a struggle. Once we clear all of that, I might be convinced that the oil market is going to recover for the longer term, but at the end of the day, it is worth noting that there is a lot of demand destruction out there due to the fact that we are getting ready to have a massive recession in a lot of developed countries.

I do believe that it is probably easier to break down than it is to have a sustainable rally at this point, but it is possible that we will get some type of turnaround. At this point, it still favors the downside as we have seen a “lower high” on the longer-term chart as well. We just have not broken down below the support level from the parabolic move for a couple of months ago, and once that gives way, that would open up a massive amount of shorting opportunities.

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.

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.