WTI Crude Oil

Crude Oil Price Update – Bullish Traders Trying to Build Support Base at $42.01

U.S. West Texas Intermediate crude oil futures rallied on Monday, underpinned by the news that OPEC+ producers almost fully complied in July with their global production cut accord, and after U.S. officials said China is in compliance with the first phase of the two nations’ trade deal.

On Monday, October WTI crude oil settled at $43.17, up $0.86 or +2.03%.

Also helping to drive prices higher was a report that said Chinese state-owned oil firms have tentatively booked tankers to transport at least 20 million barrels of U.S. crude for August and September. Meanwhile, a weaker U.S. Dollar may have drawn the attention of foreign buyers of dollar-denominated U.S. WTI crude oil.

Daily October WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $43.68 will signal a resumption of the uptrend. The main trend will change to down on a move through the nearest swing bottom at $39.00.

The minor trend is also up. A move through $41.33 will change the minor trend to down. This will also shift momentum to the downside.

The long-term 50% to 61.8% retracement zone is $42.01 to $46.43. Buyers have been trying to establish support at $42.01 for about 10 trading sessions.

The minor range is $39.00 to $43.68. Its retracement zone at $41.34 to $40.79 is additional support.

Short-Term Outlook

Trader reaction to the long-term 50% level at $42.01 will continue to set the tone in October WTI crude oil. It may be able to provide support, but it has no control over momentum and volatility.

While holding above $42.01 will indicate the presence of buyers, it’s going to take a major change in upside momentum or the return of volatility to trigger the acceleration needed to eventually reach the major Fibonacci level at $46.43.

Whatever upside momentum there is in the market will start to weaken if $42.01 fails, but the short-term retracement zone at $41.34 to $40.79 should be there to catch the break and perhaps bring in new buyers.

However, all upside bets will be off if there is a sustained move under $40.79. The market won’t turn especially bearish if this level fails, but it will solidify the outlook for an elongated sideways trade.

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Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.