Technicals | Mar 27 2024
Bottom Line 26/03/24
Daily Trend: Up
Weekly Trend: Up
Monthly Trend: Up
Support Levels: $65.00 (zone)
Resistance Levels: $80.00 – $82.50 (zone) / $95.00 (zone) (May 2024)
All prices US$/bbl Nymex WTI crude futures
Technical Discussion
Reasons for bullish optimism:
→ bounce off capitulation low in April 2020 has stayed robust to this point
→ Green energy vs Fossil fuel battles globally becoming heavily politicized
→ Elliott Wave count remains complex yet still looking for higher longer term
→ bullish bets off the table below $65.00
Crude oil futures rose Monday as Ukrainian drone strikes disrupted Russian refining capacity and Moscow ordered output cuts to meet OPEC+ targets. The Crude Oil contract for May gained $1.32, or 1.64%, to settle at $81.95 a barrel. The Brent contract for May added $1.32, or 1.55%, to settle at $86.57 a barrel.
Russia has ordered companies to cut oil output to meet Moscow’s commitments to OPEC+, and several OPEC+ countries have agreed to voluntary production cuts totalling 2.2 million barrels per day through the second quarter.
A Ukrainian drone attack caused a fire at the Kuibyshev oil refinery in the city of Samara over the weekend and industry sources have stated that one of the major refining units at the facility was knocked out after the assault. Geo-political instability somewhere in the world just seems to be the norm these days!
Technically we are positioning the trend as being bullish in Crude Oil yet admittedly we would like to see price action doing a little better than it is at the moment. The move north has been reasonably solid yet overall it continues to lack the conviction we would ideally like to see if a higher degree Wave-(3) or (C) north is now in motion.
A higher swing low pattern trigger from here above $83.11 may be the catalyst we are looking for yet we will just have to wait and see. It will certainly confirm a breakout above the $80.00-$82.50 resistance zone which will be a positive, yet we would like to see it trigger some more convincing impulsive price action than what we are presently seeing.
As we mentioned in our video tonight, a swing higher from here may bring into play some Type-A bearish divergence on the dailies, yet as also mentioned it doesn’t look to be overly strong. So for now we are going to treat it as insignificant.
The 200-day MA is currently doing an excellent job of keeping price above it so this is also encouraging, yet at the moment volume is a little low so any increase here on the next swing higher will certainly be welcomed. So overall we remain optimistic that the Bulls are starting to gain some ascendency here yet we are still looking for price action to categorically prove this to be the case. We will keep an eye on it.
Trading Strategy
We are presently long at $74.41 and in between reviews have raised our stop into some small profits circa $74.80. The next stop adjustment will be up toward the $80.00 zone yet we need to see price action perform with better upside conviction over the coming weeks before we make the next stop adjustment. So a little more patience is required on the risk management side of things.
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