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WTI Crude Oil Price Forecast: 34.79 next key support level

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by , 01-06-2016 at 01:54 PM (911 Views)
      
   
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  • "A mysterious even happened as markets opened in 2016. Oil rose. Nevertheless, before lunch would ring in London on January 4, the first trading day of 2016 Crude fell."
  • "There was a confluence of resistance at the $38/bb zone that saw Crude post a bearish Shooting Star formation. However, the most notable part of that zone of resistance is that the zone includes the August 24 closing low. When past support acts as new resistance that can be a prelude to a very strong move. Fundamentally, the rise in Oil was blamed on tensions between Saudi & Iran. However, it seems that the disagreement between the two Oil-producing nations shows there is a lack of supply control, which very well may continue to add to price pressure on the commodity."
  • "Of course, this aligns with rising non-OPEC supply from Russia & the United States which aligns with the bearish technical picture. If there is a bullish note on Oil, it has to do with Institutional Positioning as Hedge funds close out 14,699 bets that crude oil will fall according to Commodity Futures Trading Commission data. However, short covering and new longs are not the same things, and Oil is mainly seeing the former in play."

As we see from the chart above - crude oil is on bearish market condition with the secondary between 23.6% Fibo resistance level at 39.39 and Fibo support level at 34.79.

  • If the price will break 39.39 resistance level so we may see the local uptrend as the secondary bear market rally to be started.
  • If price will break 34.79 support so the bearish trend will be continuing.
  • If not so the price will be ranging within the levels.

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  • Recommendation to go short: watch the price to break 34.79 support level for possible sell trade
  • Recommendation to go long: watch the price to break 39.39 resistance level for possible buy trade
  • Trading Summary: ranging bearish




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