Crude Oil: Trading between a particular channel, what next ?

Overview: – By analyzing the daily technical chart we can see that crude oil is trading in the very narrow ranged uptrend channel where bulls were leading in the game and they arrived at $65.62c level however after arriving at that level bulls denied to move up further due to which we have seen a shooting star candlestick followed by a big bearish marabuzo candlestick on the daily chart after that we have seen 3 consecutive negative trading session and eventually on the weekly as well as monthly basis crude converted all the gains into losses.

In our previous report also we mentioned to buy the crude oil at at current level $55  for the target of $57 and $58 with the tight stop loss of below $53 on closing basis and our both target has been achieved so we are expecting that our readers must have made handsome profit from this move.

Fundamental analysis: – The energy benchmark seems to have negatively affected by the sluggish demand outlook due to the US-China tussle. Though, traders are more concerned for the next week’s meeting of major oil producers in Vienna. OPEC are due to meet on December 5th in Vienna and it looks like there could be some fireworks. Crude oil tumbled down after supply disruption concerns mounted on news that the Prince Abdulaziz bin Salman who recently took over from Khalid Al-Falih may voice concerns over the current OPEC supply cut deal.It is said that Saudi Arabia will no longer compensate for other members non-compliance. it seems that Saudi Arabia will not pick up the slack left by other countries in the cartel.

Technical Analysis: – From technical prospective we can see that crude oil has arrived at lower line of the uptrend channel and even one more positive thing is that bulls have arrived at 200 SMA line which is a strong key support level so from here we are expecting that bulls will bounce back from here and we will get further confirmation above $60 level. A daily closing above the $60 level will open the way towards the $65 level once again. Odds are in favor of bulls and daily to weekly bias remains bullish on the crude oil. A bullish crossover on the MACD indicator is favoring the bulls and  RSI again turning back to upside however presently it is below the 50 level.

The $60 is the make or break level so we need a clear breakout of this level a valid breakout of this level will open the way towards the $65 and $70 level and there is high probability that we may see this occurrence. Presently crude oil is trading below all the minor EMA lines and major SMA line (200) is about to test.

What next:- On contrary the $55 is the stumble block for bears and below this level we may see downfall till $53 and furthermore. The $62 level is immediate resistance level followed by $65 whereas $55 level is strong key support level followed by $53 level.

Trade idea:- Investors and traders are advised to buy the crude oil at $58.20-58.10 and for the target of $60 and $62 with the tight stop loss of $55 on closing basis.



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