Commodities Market Analysis: WTI CRUDE OIL – 4th FEBRUARY 2019

WTI CRUDE OIL

Current Price 52 Week Range Daily Return %

55.332 42.67– 76.29 +2.94%

Report Headlines

• Bulls look to break above the 54.062 – 55.953 resistance zone

• Inverse head and shoulders pattern suggesting more upside once the neckline resistance is

broken.

• Breaking above the 54.062 – 55.953 resistance zone should give the bulls momentum to push

higher.

OUR POSITIONS

Our position stop losses will be moved into a ‘break-even’ threshold to minimise downside risk, once the first target has been achieved.

Support Zone Resistance Zone Pivot Point

50.964 – 49.344

43.713 – 41.155

54.062 – 55.953

57.364 – 61.219

63.147 – 64.365

52.95

Direction Entry Price Targets

LONG 56.105 56.160, 56,333, 56,729, 57, 57.364, 57.50, 57.868

Direction Entry Price Targets

SHORT 52.85 52.70, 52.50, 52, 51.85, 51.55, 50.96

Technical Perspective

Since posting new yearly highs in October just above the $75 per barrel price level, Oil started to decline

lower at a considerably fast rate, with Friday 23rd November trading session seeing the market tumble

more than -7% lower in just one day to just above the $50 per barrel price level, which brought the market

down over -30% in just 7 weeks. With there being 40 trading days since the start of October 2018, there

has been 16 bullish days and 24 bearish days with the bears taking control of the market bringing it over -

30% lower.

There is also an ascending wedge formed in the

market where the trend line resistance is currently

in line with the 54.062 – 55.953 resistance. This has

proved previously to hold and reject price lower,

however once we can break out of the wedge

pattern and above the trend line resistance then

the market should then also be above the

resistance zone. Above here we are expecting

the market to continue pushing higher with bullish

momentum targeting the 57.354 – 61.219

resistance zone and then the 63.147 – 64.365

above there.

Towards the end of 2018, the market bottomed within the

43.715 – 41.155 support zone which we previously stated

we expected this zone to hold for buying opportunities. The

market is now testing the 54.062 – 55.953 resistance zone

which is also the neckline for the inverse head and

shoulders pattern that has formed. Once the market can

break above this zone we are looking to enter a long position as we expect the market to rally higher. The actual

neckline for the pattern is more towards the $55 level

however we have adapted this into a resistance zone in

confluence with the 61.8% fibonacci retracement level

from the 2018 highs to the 2018 lows.

The market is currently set to break above this resistance

zone triggering the head and shoulders pattern.

We will be using a pivot level of 52.95 to start the week. If the market can keep above here we

expect the market to break resistance. However a break below and we expect a dip into the 50.96

– 49.34 support before pushing higher.

This is the updated daily chart of Oil. As you can see the 50.142 – 48.479 support zone is holding the market currently along with

the long term trend line support dating back to early 2016. It is vital that the bulls are able to keep above this support zone as a

break below will issue a further decline lower.

Using the 52.95 level as a pivot point. If the bulls fail to keep above this level we are expecting a dip into the 50.96 – 49.34

support zone where the market should be able to hold and push higher from there as the projected movement suggests.

However if we can keep above the pivot point for the start of the week, expect the 55.95 top resistance level to break to enter

the long position.

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