May West Texas Intermediate Crude Oil futures are trading higher shortly before the regular session opening. The market is being boosted by a decline in the U.S. rig count last week and speculation that the U.S. may reimpose sanction on Iran which would affect supply.
Daily Technical Analysis
The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of a closing price reversal top at $66.55 on March 25.
A trade through $66.55 will negate the closing price reversal top and signal a resumption of the uptrend. A move through $63.72 will change the main trend to down.
The short-term range is $66.55 to $63.72. Its 50% level or pivot is $65.14. This price is controlling the direction of the market today.
The intermediate range is $60.18 to $66.55. Its retracement zone at $63.36 to $62.61 is support.
Daily Technical Forecast
Based on the early price action, the direction of the market today is likely to be determined by trader reaction to the pivot at $65.14.
A sustained move over $65.14 will signal the presence of buyers. This could trigger a quick move into a downtrending Gann angle at $65.55. We could see a technical bounce on the first test of this angle.
Taking out $65.55 could trigger an acceleration into the next downtrending Gann angle at $66.05, followed by another downtrending Gann angle at $66.30. This is the last potential resistance angle before the $66.55 main bottom.
A sustained move under $65.14 will indicate the presence of sellers. This could trigger a quick move into a steep uptrending Gann angle at $64.72. Since the main trend is up, we could see a technical bounce on the first test of this angle.
If the angle at $64.72 fails as support then look for a further break into a pair of uptrending Gann angles at $64.22 and $63.97. The latter is the last potential support angle before the $63.72 main bottom.
Watch the price action and read the order flow at $65.14 all session. Trader reaction to this price will tell us if the bulls or the bears are in control.