Crude Oil Price Update – At Pivot Area for Reversal Bottom or Another Steep Plunge

Potential support levels failed early Tuesday, allowing technical traders to continue to press July West Texas Intermediate crude oil prices lower. Liquidation by professional fund managers may be behind the selling pressure today. Short-sellers continue to bet that global supply will increase substantially if OPEC decides on June 22 to raise output by as much as 1 million barrels per day, just as U.S. production approaches near-record levels.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The market is in no position to change the main trend to up, but it is down nine sessions and in the window of time for a closing price reversal bottom. A prolonged move down in terms of price and time often ends with the formation of this type of bottom.

The minor trend is also down. The minor trend will change to up on a move through $68.67.

Crude oil is now trading on the weak side of a pair of 50% levels at $64.77 and $64.92. Both levels are new resistance. The nearest downside target is the April 6 bottom at $61.73.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the July WTI crude oil market is likely to be determined by trader reaction to the pair of 50% levels at $64.77 and $64.92.

A sustained move under $64.77 will indicate the presence of sellers. If this generates enough downside momentum, we could see a test of a Fibonacci level at $63.03, followed by a main bottom at $61.73.

A sustained move over $64.92 will signal the presence of buyers. This could trigger a short-covering rally into $66.00, followed by $67.32.

Start preparing an exit strategy if short since crude oil is in the window of time for a potentially bullish closing price reversal bottom. It could turn fast once short-sellers decide to start booking profits.