Could it be that the price of crude oil is rebounding?
The price of US- type West Texas Intermediate crude oil has experienced a deep correction since touching this year’s highest level in the range of $ 75.25 per barrel. Currently, prices are observed moving in the range of $ 67.75 per barrel. What’s interesting is that technically the price is moving in the support area formed by the 50 MA and 100 MA which is seen on the Daily chart. If noted, the support area is currently at $ 66.35 to $ 69.42 per barrel.
Current market conditions based on the stochastic oscillator on the same chart almost show oversold indications. This is a crucial moment, because confirmation of bullish signals in the current support area potentially will provide a strong enough buy signal. Especially if we try to look at the Weekly chart, where we can see an upward trend that is quite well marked with the trendline. Prices are also getting closer to the trendline.
We know that the trendline can also function as a support area.Stochastic is also getting closer to oversold conditions on the Weekly chart.
Based on the technical analysis, we can draw a temporary conclusion that in general there is a chance of a rebound in crude oil.
All we need to do is wait for bullish signal confirmation in the support area. For confirmation, we will refer to the Daily chart, precisely in the range of $ 66.35 to $ 69.42. The rebound potential itself is up to the range of $ 70.80 to $ 72.50. If you open 1 lot position in the oil contract, then the profit opportunity that you can get is around 300 to 500 pips, or the equivalent of 30 to 50 million rupiah.
The area to watch out for is the support area of $ 63.60, because this bullish scenario probably won’t work if the price breaks below that level.If the price of oil breaks below $ 63.60 per barrel, there is a possibility that crude oil prices will continue to weaken to the next support area which is the range of $ 60.84 to $ 57.75 per barrel.
Crude oil is still moving in an uptrend. The entry area is in the range of $ 66.35 to $ 69.42, where you can try to find a buy signal confirmation. The rebound target is the range of $ 70.80 to $ 72.50.
The anticipation area is $ 63.60, because this bullish scenario could fail if the price breaks below that support and opens bearish opportunities to the range of $ 60.84 to $ 57.75 per barrel.
Congratulations on “hunting”.
Please express your opinion about our analysis in the comments column.