November 26, 2018
Last week we have witnessed a clear sell off in the crude oil, as we can see that it marked a low of $50 level which was the fresh 2018’s year low on the daily chart. Black gold reversed all the yearly gains and it lost almost 10% in the last week. From the fundamental prospective China’s gasoline exports fall to its lowest level in more than a year. OPEC is reportedly looking to pull back production to 2016 levels. However, the Wall Street Journal recently reported that Saudi Arabia and OPEC was looking to cut the current production by around 1 million barrels per day to 2016 levels and helped the WTI recover a small portion of its daily losses.
Presently crude oil is hovering at $50 level which is a strong key support level and it’s falling down continuously from $76.87 level so most of the indicators and oscillators are signaling oversold. It would be very risky call for the time being that initiate the long position but we would suggest our traders and investors that it’s really an opportunity to accumulate the crude oil as it’s market rule that High risk and high gain. Well it’s an early call and the recent development on the chart we will get further confirmation if bulls made a fair counter attack.
Some correction can’t be ruled out but we will clear trend reversal signal once crude oil trade and settles above $55 level initially .A daily closing of 2 or more days will give us pure confirmation of trend reversal. Most technical indicators in the short and medium term are showing extreme oversold readings, so we are expecting some correction. Presently crude oil is trading below all the major and minor EMA lines and indicating that bears are controlling the game but it seems like they have completed their journey and now they will be on the break.
Odds are in favor of bears and intraday bias remains bearish on the pair. A bearish crossover on MACD indicator is also favoring the bears.RSI has arrived into extreme oversold territory so here we are not relying on the indicators as they are in extreme oversold territory; we are expecting trend reversal signals. The. 55.00 levels is immediate resistance level followed by 60.00 whereas 50.10 level is strong key support level followed by 48.20 level.