WTI Crude Oil: Mediocre dynamics…

We’ve been scratching our heads over the market moves for some time. Various attempts to trigger a correction late in the primary uptrend have failed to lead to a dip of any significance. Buyers are clearly a lot more resilient that anticipated. This does not automatically make the market bullish however; dynamics to the upside are mediocre and various indicators still point to stalling of the main trend.

A typical case of “to strong to short and to weak to buy”. For the near term a re-test of the 74.45 can be expected. For the longer term it is hard to make a case since there are no reliable projections. The 92-zone is the first pivotal area and above that the ‘psychological 100-zone. Difficult markets. If long, maintain trailing stops at 64.90 or max 62.00. We refrain from new buying due to poor risk/reward and overall unhealthy trend conditions.

  • Primary trend: moderately positive
  • Outlook/expectations: late phase trend with mediocre dynamics
  • Strategy: hold-long with trailing stops or avoid
  • Support: 64.90 / 62.00 / 58.95
  • Resistance: 71.50 / 74.45 / 92.00 / 100*
  • Major shift in sentiment below 62.00

Weekly chart WTI Crude Oil Future (front month, NYMEX)

14 September 2018 – Pressure increasing

Although not bearish yet, various signs are suggesting sellers are slowly taking over control. The internal trend line of early 2018 has been taken out and a new lower peak seems to be forming around the cloud resistance zone at ~70. Indicators are somewhere between neutral and somewhat negative. In other words, they do not contradict the general wariness of the market. Perhaps more interesting is the lack of a significant move since recent USD weakness.

Investors should prepare for weakness over the coming days and weeks. Trigger for a full swing correction come in at 64.85, so there is still some leeway on the down side. If/once cleared, our price target comes in at 55.22 with 58.95 being a (very) minor support level.

Settling above 71.50 cancels the bearish forecast.

  • Near term trend: neutral/slightly bearish
  • Long term trend: neutral
  • Outlook/expectations: growing pressure, negative < 64.85
  • Strategy: avoid, prepare for shorts
  • Support: 64.85 / 58.95 / 55.20*
  • Resistance: 71.50 / 74.45+
  • Outlook neutralized: above 71.50

Weekly chart WTI Crude Oil (NYMEX)

27 August 2018 – Avoid

The multi-year uptrend is still intact, but all momentum has ebbed away. A period of consolidation and perhaps some pressure can be expected. Although the market is still too strong to actively short, we do suggest looking elsewhere for opportunities rather than buying. Risk/reward is too unfriendly and conviction has simply faded too much.

  • Near term trend: neutral
  • Long term trend: mildly positive
  • Outlook/expectations: uncertain
  • Strategy: avoid
  • Support: 64.20 / 60.05 / 59.10 / 57.50 / 53.50-
  • Resistance: 72.60 / 74.50+
  • Outlook neutralized: n/a

Weekly chart WTI Crude Oil (NYMEX)

25 June 2018 – No Idea

Our earlier bearish outlook has faded with the recent bounce. Nevertheless, too many fragile elements remain visible to change the outlook or focus on the buy side. Upside potential seems limited, but the intraday chart is relatively strong.

A typical case of “to weak to buy and to strong to short”. Put simply, we have no idea. Better let the market figure things out before taking action.

  • Near term trend: positive
  • Long term trend: neutral
  • Outlook/expectations: no idea
  • Strategy: avoid
  • Support: 65.05 / 60.05 / 59.10 / 57.50 / 53.50-
  • Resistance: 70.45 / 72.60
  • Outlook neutralized: n/a

Weekly chart WTI Crude Oil (NYMEX)

15 June 2018

Near term dynamics are pretty negative. Divergence and a trend breach suggest a larger decline is getting under way. Dipping below 65.50 should speed things up to the down side. 60.05 and roughly 59.10 then come into play.

We are shorting the market with stops above 68.40.

  • Near term trend: negative
  • Long term trend: neutral
  • Outlook/expectations: deep correction in uptrend
  • Strategy: trading short-entry or avoid
  • Support: 65.50 / 60.05 / 59.10 / 57.50 / 53.50-
  • Resistance: 68.40 / 70.45 / 72.60
  • Outlook neutralized: above 68.40

Daily chart WTI Crude Oil (NYMEX)

20 March 2018

After a considerable struggle, buyers have maintained their grip on the market. The counter trend phase of the past few months is coming to an end.  A new higher base has been set at the important 38.2% retracement and currently prices are rallying above the internal trend line at 62.55. Expect a renewed push towards 66.65 (pivots early 2018) and the new price projection at 68.25 and the weekly level at 79.05.

  • Current trend: positive
  • Outlook/expectations: uptrend continues, positive
  • Strategy: hold longs
  • Support: 60.45 / 58.50 / 57.10 / 53.50-
  • Resistance: 62.54 / 66.65 / 68.25* / 79.05*
  • Outlook neutralized: below 60.45

Daily chart WTI Crude Oil (NYMEX)