Well the crude oil is doing very good job since the starting of the year however so consolidation phase can’t be ruled out, but overall journey from $44.31 1st January 2019 to almost $64.80 in the last week was remarkable for the traders and investors. Well overall bulls leading and making successively higher highs and higher lows and heading north side by taking the support of an uptrend line. Positive developments surrounding the US-China trade deal and welcome data from one of the world’s largest oil consumer, China, fuelled WTI prices to $64.65 on Friday.
In our previous report also we have mentioned to buy the crude oil at $55 level for the target of $60 and $65 whereas on MCX we have advised to long the crude oil around 3900 for the target of 4250 levels which has been achieved. We are hoping that our readers must have made smart profit from this anticipated move.
Russia’s Finance Minister Anton Siluanov said that Russia and OPEC may decide to boost production to fight for market share with the United States. However, the Russian Finance Minister spotted fears of oil prices sliding to as low as $40 as a catalyst that offers the dilemma. On the other hand, the International Monetary Fund (IMF) held a thirty-ninth meeting where the global lender reiterated its fear for macro growth with statements like “risks remain tilted to the downside”.
One more evidences in the favor of bears is that, it started to decline from the exact 61.8% fibonacci retracement line i.e. $64.80, it is a low of October 2018 also which is also providing trend reversal signal from short term to intermediate term point of view.
The 4540 level can be considered as strong resistance level followed by 4600 level whereas 4270 level can be taken as support level followed by 4140 level which is a strong support level for the time being.
The RSI is also favoring the bears from overbought territory and a bearish crossover of MACD indicator is about to occur. A bearish divergence on the RSI is also providing us trend reversal signal and bears has started to decline already, now we have to watch it whether it’s a correction or trend reversal signal? Well time will tell us but based on the chart and explanation above we can say that its trend reversal signal.
Trade idea:- Odds are in favor of bulls and our weekly to daily bias remains bearish on the crude oil. Traders and investors are advised to go for short 4450-4480 level for the target of 4250 and 4000 level with the tight stop loss of 4640 level.