Stephen W
I am a Technical Forex Trader & Analyst.
Trading the Forex markets on behalf of Samuel & Co Trading in Watford, I am here to take on the game and prove the naysayers wrong. Come and join my journey as I release my weekly technical analysis and results of last week’s predictions, opening the floor to feedback, open conversation and opinions. I look forward to engaging with you all.
This week I will be analysing one of the most popular commodities on the map: WTI Crude Oil. Nevertheless, as always with my approach - I’ll be analysing this commodity from a technical aspect rather than focussing on the fundamental movers behind this ‘liquid gold’ market…Although bearing in mind from the get-go, it is very hard to ignore the fundamentals of oil when the price is ‘controllable’ by the big oil suppliers.
Weekly Chart –
Source: uk.tradingview.com
As we look at the weekly chart, WTI has been in recovery mode since its January 2016 low of $26.2, a level that hadn’t been seen since May 2003, 13 years prior. Back to today and moving within a fairly up-trending market, price continued to rise all the way up until the double top formation created in the July & October 2018 peaks, where price broke the $75 level but was unable to close above the high that was last formed in December 2014. After producing this double top formation, the market produced 7 consecutive weeks of bearish candle closes, with only a small 2-week consolidation period before generating another 3 weeks of bearish momentum all the way down to its December 2018 low of $42.6. Rolling into 2019, we’ve now seen price recover all the way back up to the 0.5 Fib level ($60.2) along with dynamic resistance from the weekly 50 & 200 ema crossover, leaving the question - ‘where will the market move next?’. At the time of writing, the price has rejected the 0.5 Fib area, but this doesn’t mean the market is now going to fall to the floor, in fact, there are a couple of potential possibilities that may play out here in the coming weeks/months.
As I head down to the lower time-frames you’ll see how I adjust my technical analysis for an intraday entry point and potential profit target areas.
Daily Chart –
Source: uk.tradingview.com
Here on the daily chart, we can see the rising wedge style pullback that price has been forming in since the beginning of the year (2019). I’ve also now placed the Fib retracement tool over the rising wedge and drawn in 2 scenarios that we could see develop moving forward. I’ll move down further to the 1 hour chart (below) and delve slightly deeper into how these potential movements may play out.
1 Hour Chart –
Source: uk.tradingview.com
On the 1 hour, it’s slightly clearer to see how these 2 possible movements could come into fruition. Even with my personal opinion being slightly weighted towards scenario B, I’m sure you are all aware, however - no one knows where the market is due to move next, nevertheless there may be an opportunity to take profit from both movements (subject to both trades fulfilling strategy criteria of course), here’s how profiting from both could play out…
If price falls out from the underside on the rising wedge, before entering a short position, I would be waiting for confirmation to enter; from price pulling back to retest and reject the underside of the wedge, with this criterion being met I’d place my short entry and look to take profit at my initial target of the 0.5 Fib level. Here is where I would be patiently prepping for further confirmation of where the market could head next, either fall to the floor following scenario A, or reject the 0.5/0.618 Fib levels and follow my Scenario B outcome. With my forecast weighted towards scenario B, upon a price rejection of the key Fib levels and my entry criteria being met - I’d be looking to take this trade all the way back up to the profit target and previous support now turned resistance level of $64.
I’m intrigued to see how this market moves over the coming weeks as it’s hard to solely trade a commodity market such as WTI Oil from just technical analysis alone. I’ll be sure to keep you posted with how it plays out.
Thanks for your time today and as always, the floor is open to discussion – I look forward to your thoughts.
Any statements non-factual in nature constitute only current opinions, which are subject to change. The information presented in this article is not a specific buy or sell recommendation and is presented solely for informational purposes only. Not to be taken as financial advice. Investors are advised to obtain the advice of a qualified financial and investment advisor before entering any financial transaction.