June's AI-picked stock updates now live. See what's new in Tech Titans, up 28.5% year to date.See Full Update

WTI Up Nearly 10% In December

Published 12/18/2019, 04:12 PM
Updated 07/09/2023, 06:31 AM
CL
-
2222
-

Lest anyone doubt that the U.S.-China agreement is a big deal, they should look at the price of WTI over the last 2 months. Only 3 weeks after the Saudi Aramco (SE:2222) drone attacks, price put in a hammer-low October 3 near 51.00 and began trading in a rising channel. Price then went on to close above the top of the channel near 61.00 (depending how the upper channel trendline is drawn, it may have closed right on the trendline). And although not as widely followed as other Fibonacci levels, price is near the 78.6% Fibonacci retracement level from the September 16 highs to the October 3 lows at 60.80.

Daily West Texas Oil

What’s even more impressive is the move since December 1, which is when the price of West Texas Oil has rallied 10%. There is a combination of fundamental factors that have helped contribute to this move:

1) The China outlook for oil, as the U.S.-China trade deal has finally been resolved

2) The meeting in Vienna where OPEC members “agreed” to cut production by 500,000 barrels per day

3) The promise from OPEC+ (which includes Russia) to cut back production

4-Hour West Texas Oil

The vertical green line on the 240-minute time frame shows oil's price on Monday, December 2. Price opened at 55.40, after putting in a low near 55.00 in the final bar on Friday, November 29. Since then, WTI has rallied to as high as 61.00 today and has yet to look back. 61.00 may be the “Make It or Break It” level. In addition to this being the rising channel trendline on the daily time frame, price has also formed a rising wedge on the 240-minute chart. Also, the RSI is at overbought levels (however it is not diverging with price).

If WTI can close decisively above 61.00, there isn’t any resistance until the 63.73 level from the September 16 highs. If price breaks lower out of the wedge, the target is a 100% retracement of the wedge, which would be back to 55.00. However, it would have to get through lots of support levels to get there, the first of which is the bottom trendline of the wedge near 60.00. Below that is horizontal support near 58.67 and the 200-day moving average at 57.63 (see daily). Not to mention that depending on where the high of the current move is, there will be Fibonacci retracement levels to watch as price pulls back.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.