Oil Price Forecast: WTI Rebounds into November- 90 Hurdle Awaits

2022-11-01 18:00:20

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Crude Oil Price Chart – WTI Weekly
Crude Oil Trader Sentiment – WTI Price Chart

Crude Oil Technical Forecast: WTI Weekly Trade Levels

Crude Oil updated technical trade levels – Weekly Chart
WTI rebound off technical support in focus into November open
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Crude oil rallied more than 8% in October with WTI building on the September rebound off critical support. The recovery is in focus heading into November with oil poised for a possible test of downtrend resistance. These are the updated targets and invalidation levels that matter on the oil price weekly technical chart. Review my latest Strategy Webinar for an in-depth breakdown of this crude oil price technical setup and more.

Crude Oil Price Chart – WTI Weekly

Chart Prepared by Michael Boutros, Technical Strategist; Crude Oil (WTI) on Tradingview

Notes: In my September Oil Price Weekly Technical Forecast I noted that WTI was testing support into 83.28 and that, “A break lower exposes the first major support objective at the 2022 yearly open / 2018 high at 75.35-76.87.” Crude broke lower just days later with the plunge registering a low at 76.23 before reversing sharply higher into October. A rally of more than 22% faltered into the 52 week moving average which now converges on the median-line and the 38.2% Fibonacci retracement of the June decline around 93.62-94.34- now key resistance.

Initial weekly support now rests back at 83.28 with key support steady at 75.35-76.87- a break below this threshold would threaten another accelerated decline towards the lower parallel (currently near ~72) and the August 2018 low-week close / 2019 high at 65.92-66.57. A breach / weekly close above the median-line would shift the medium-term focus higher in oil with such a scenario exposing subsequent resistance objectives at the 75% parallel near ~100 backed by the 61.8% retracement at 105.54 and the yearly high week close at 110.01- look for a larger reaction there IF reached.

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Bottom line: Oil prices have rebounded off key support with the rally breaking out of a multi-month downtrend. From a trading standpoint, losses should be limited to 83.28 IF prices are heading higher on this stretch with a breach above 94.34 needed to suggest a larger reversal is underway in crude prices. For now, look for a breakout of this range for guidance. Review my latest Crude Oil Price Short-term Technical Outlook for a closer look at the near-term WTI trade levels.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Crude Oil Trader Sentiment – WTI Price Chart

A summary of IG Client Sentiment shows traders are net-long crude oil - the ratio stands at +1.83 (64.66% of traders are long) – typically bearish reading
Long positions are 7.10% higher than yesterday and 9.85% lower from last week
Short positions are 9.32% lower than yesterday and 12.55% higher from last week
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests oil prices may continue to fall. Traders are more net-long than yesterday but less net-long from last week. The combination of current positioning and recent changes gives us a further mixed crude oil trading bias from a sentiment standpoint.

Oil - US Crude Bullish

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