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Oil Technical Forecast: Oil Rally Floats into Trend Resistance- WTI Levels

Oil Technical Forecast: Oil Rally Floats into Trend Resistance- WTI Levels

Michael Boutros, Strategist

Crude Oil Technical Forecast: WTI Weekly Trade Levels

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Oil prices are attempting to mark a seventh consecutive weekly rally with WTI dipping in and out of positive territory on Wednesday. While the broader outlook remains constructive, the immediate advance may be vulnerable in the days ahead and we’re on the lookout for possible near-term exhaustion to offer more favorable opportunities. These are the updated targets and invalidation levels that matter on the oil price weekly 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

Crude Oil Price Chart - WTI Weekly - CL Trade Outlook - USOil Technical Forecast

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

Notes: A six-week advance takes oil prices into the upper parallel of the multi-year pitchfork we’ve been tracking off the 2016 and 2020 lows (currently ~89), with the 61.8% Fibonacci retracement of the 2008 decline at 90.68 just higher- both levels of interest for possible topside exhaustion. Initial weekly support rests back at the 2021 swing highs / 2013 low at 85.38/61 with the medium-term outlook still weighted to the topside while above the median-line (currently ~81). Broader bullish invalidation now raised to the 2011 low / 2022 yearly open at 74.94-75.13. A topside breach / close above Fibonacci resistance would keep the focus on the upper parallel (currently ~93.50s) and the 100 Dollar mark- look for a larger reaction there IF reached.

Bottom line: The oil price breakout has extended into uptrend resistance with the immediate rally vulnerable while below 90.68. From at trading standpoint, a good zone to reduce long-exposure / raise protective stops – losses should be limited to the median-line IF price is heading higher with a topside breach likely to fuel another accelerated push towards the upper parallels. I’ll publish an updated Crude Oil Price Outlook once we get further clarity on the near-term WTI technical 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

Crude Oil Trader Sentiment - WTI Price Chart - CL Retail Positioning - USOil Technical Forecast
  • A summary of IG Client Sentiment shows traders are net-short crude oil - the ratio stands at -1.91 (34.39% of traders are long) – typically bullish reading
  • Long positions are 12.58% lower than yesterday and 2.88% lower from last week
  • Short positions are 2.00% higher than yesterday and 5.08% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests Oil - US Crude prices may continue to rise. Traders are more net-short than yesterday but less net-short from last week. The combination of current positioning and recent changes gives us a further mixed Oil - US Crude trading bias from a sentiment standpoint.

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Previous Weekly Technical Charts

--- Written by Michael Boutros, Technical Strategist with DailyFX

Follow Michael on Twitter @MBForex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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