WTI Crude Oil market rises at the weekend

WTI Crude Oil market rises at the weekend
WTI Crude Oil market rises at the weekend
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The WTI Crude Oil market rallied a bit during the course of the day on Friday, as we are now above the $80 level. Furthermore, we are above the neckline of the inverted head and shoulders pattern, So I think that affects as well. At this point, I anticipate that crude oil will go looking towards the 200 day EMA if we can break above the highs for the week.

The 200 day EMA is close to the $86.50 level, so the next target could be the $90 level. On the other hand, if we were to turn around and break below the 50 day EMA, we could go down to the $80 level, which is a large, round, psychologically significant figure. When you look at the longer-term behavior of the chart, it has been very negative, but we are starting to look at the possibility of China reopening, and I think a lot of traders are excited about that. However, we will have to see if the rest of the world follows suit or not.

When you look at this chart, you have to keep in context that we have formed a nice little double bottom, or an inverted head and shoulders formation, but we also have to worry about the fact that European and US imports from China have contracted significantly so how much support do we get It remains an open question. However, it looks as if we are at least going to be looking towards some type of short-term recovery, and it may be too late at this point anyway.

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If we were to turn around and break down below the 50 day EMA, it is likely that the $80 level would offer plenty of support, but a breakdown below there would be very negative. In fact, it may not only be negative for oil, However, it is more than likely that we will see a lot of negativity in other markets, plus it would be a sign of a “significant risk-off move”. After all, this is still a very noisy market, so make sure that your position size is reasonable, and make sure that you are only adding to your winning positions, as you could get hurt if you are not careful in trading the crude oil markets over the next several weeks.

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