Crude Oil Technical Forecast: WTI Weekly Trade Levels
- Crude Oil updated technical trade levels – Weekly Chart
- WTI rips through uptrend resistance as Russia’s war on Ukraine rages- record highs in view
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Oil prices surged more than 71% year-to-date as Russia’s invasion of Ukraine continues to fuel a near hyperbolic move in price. A topside breach of technical, uptrend resistance (often the sharpest part of a breakout) has sparked rally of more than 40% in just two-weeks and puts into view the record highs set back in 2008. Buckle up! The washouts are likely to be brutal here but may offer opportunities in the days ahead. 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
Chart Prepared by Michael Boutros, Technical Strategist; Crude Oil (WTI) on Tradingview
Notes: In my last Crude Oil Technical Forecast we noted WTI was testing critical uptrend resistance and that, “losses should limited to the monthly open at 88.13 IF price is heading higher on this stretch with a topside breach from here likely to once again fuel another accelerated run towards 100.” Oil was capped by this upslope for near five weeks with numerous attempts failing before finally breaking out last week. The subsequent rally has been remarkable with the WTI ripping through the 100 barrier on a stretch of more than 49% off the February low. In fact, last week registered the highest weekly RSI reading since August of 1990 when Iraq invaded Kuwait. In that instance, oil prices briefly consolidated before topping seven weeks later and another 29% higher- given current price, that would put crude oil near 165.
The advance is now testing the first of two key zones of technical resistance at the 2008 high-week close (129.29)backed by the record high-close / 2008 high at 145.29-146.73 – look for a reaction into this zone IF reached. All bets are off beyond this threshold as the geopolitical backdrop could fuel a much larger breakout here, with the most meager of technical measurements targeting initial objectives at 181.35 and the 1.382% Fibonacci extension of the 2008 decline at 202.78. Initial support now rests back at the 2013 / 2011 swing highs (112.21-114.80) backed the 2014 high at 107.51 and bullish invalidation back at 100.
Bottom line: The oil price explosion may just be gearing up here as Russia’s war on Ukraine begins to severely impact the global flow of energy. From trading standpoint, we’re in an unprecedented breakout and IF we take out the record highs, the acceleration may be even sharper. Losses should be limited by 112.21 on pullbacks IF oil prices are heading higher on this stretch witch close above 129.29 needed to keep the immediate advance viable.
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-short crude oil - the ratio stands at -1.04 (51.05% of traders are long) – typically neutralreading
- Long positions are25.84% higher than yesterday and 31.28% higher from last week
- Short positions are5.15% lower than yesterday and 1.72% lower from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Oil - US Crude prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger Oil - US Crude-bearish contrarian trading bias from a sentiment standpoint.
| Change in | Longs | Shorts | OI |
| Daily | 11% | -18% | 5% |
| Weekly | 7% | 10% | 8% |
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--- Written by Michael Boutros, Technical Strategist with DailyFX
Follow Michael on Twitter @MBForex
