Overview: – By analyzing the daily technical chart we can see that crude oil is trading and moving in the downtrend where bears are leading in the game and playing at front foot and dominating the bulls at every level. Well the tug of war is going on at the bottom lines as it is make or break level, so if will win from here then we may announce that pair has bottomed out and if bears continue to pull it below $49 level then it may arrive at $45 level.
In our previous report also we mentioned to sell the crude oil near $53 for the target of $51 and $50 with the tight stop loss of $55 on closing basis so we are expecting that our readers must have made profit from this move.
Fundamental analysis: – WTI trades 1.26% positive to $50.82 ahead of the European session on Wednesday. In doing so, the black gold nears a downward sloping trend line since January 29. However, buyers need a push to carry the latest bounce off multi-month low.
The weekly oil stockpile data from the Energy Information Administration (EIA) could offer that push to the traders if falling below 3.355M prior and 2.931M expected.
Following that, the energy benchmark could question the monthly top surrounding $52.30 and January 31 high close to $53.40. However, the quote’s further upside might have to conquer $54.40 to aim for November 2019 low near $54.85.Alternatively, $50.00 and the recent low near $49.40 are likely supports that can please sellers ahead of highlighting late-2018 numbers surrounding $48.00.
Technical Analysis: – From technical prospective a downtrend line is still valid and suggesting us to wait for the clear breakout if you want to buy the pair. On the other side if you wish to continue the trade with buy side then have a very tight stop loss of $49 level. Upside twist of RSI is favoring the bulls and providing us bullish signal at an initial phase, whereas bullish crossover on the MACD indicator is also favoring the bulls.
On a bigger picture we can see a triple bottom pattern on the daily chart which is strong reversal pattern and even third top has been formed successfully and we may announce that crude oil is bottomed out and the $58 level is the unfinished target for bulls. Odds are in favor of bulls and intraday to weekly bias remains bullish on the crude oil as long as $49 level remains intact. Overall crude oil is trading below all the major and minor EMA lines and bears are maintaining it keep the crude oil below the 200 SMA line also which is a strong level lying at $57.
What next:- With a contrarian view if bulls able to sustain above $52 level and covered all the losses then we may shift our view from downside to upside however there are very high probability for this outcome. The $52 is the next resistance level followed by $54 level which is a strong support level whereas $49 is a key resistance level followed by $47 level.
Trade idea:- Investors and traders are advised to buy the crude oil near $50.50 for the target of $52 and $54 with the tight stop loss of $49 on closing basis.
