Crude Oil Price Update – Bouncing Back from Early Session Weakness; Bulls Watching $59.14

Crude oil futures are trading lower, but rebounding from its early session low. Prices spiked lower earlier in the session in reaction to yesterday’s bearish Energy Information Administration’s weekly inventories report and fear that a global economic slowdown could dampen demand. However, today’s price action suggests investors are still willing to come in on weakness. They believe the OPEC-led supply cuts and the U.S. sanctions against Iran and Venezuela will continue to tighten supply.

At 14:26 GMT, May WTI crude oil futures are trading $59.20, down $0.21 or -0.34%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $60.39 will signal a resumption of the uptrend. The trend is safe at this time. It will change to down on a trade through $54.87.

The minor trend is up. A trade through $58.17 will change the minor trend to down. This will also shift momentum to the downside.

On the upside, the resistance is a 50% level at $59.63.

The short-term range is $54.87 to $60.39. Its retracement zone at $57.63 to $56.98 is the primary downside target. Since the main trend is up, buyers are likely to show up on a test of this zone.

Daily Technical Forecast

Based on the early price action and the current price at $59.20, the direction of the May WTI crude oil futures market the rest of the session is likely to be determined by trader reaction to the downtrending Gann angle at $59.14.

Bullish Scenario

Taking out $59.14 and sustaining the rally will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to extend into the 50% level at $59.63, followed by slow-moving Gann angles at $59.77, $60.08 and $60.23. The latter is the last potential resistance angle before the $60.39 main top.

Bearish Scenario

A sustained move under $59.14 will signal the return of sellers. This could lead to a retest of the uptrending Gann angle at $58.37. This angle stopped the selling earlier in the session. If it fails then look for the selling pressure to extend into $57.63.