Trader reaction to the minor pivot at $97.00 is likely to determine the direction of the September WTI crude oil market into the close on Wednesday.
U.S. West Texas Intermediate crude oil futures are trading higher late in the session on Wednesday, helped by a government report showing a drop in inventories, and the Russian cuts to gas flows in Europe. Perhaps putting a lid on the rally is weaker demand and a U.S. Federal Reserve interest rate hike.
At 19:33 GMT, September WTI crude oil futures are trading $98.21, up $3.23 or +3.40%. The United States Oil Fund ETF (USO) is at $77.88, up $2.72 or +3.62%.
The main trend is down according to the daily swing chart. A trade through $100.99 will change the main trend to up. A move through $88.23 will signal a resumption of the downtrend.
The minor trend is also down. A trade through $99.00 will change the minor trend to up. This will shift momentum. A trade through the minor bottom at $93.01 will reaffirm the downtrend.
On the downside, the support is a minor 50% level at $97.00, followed by a minor retracement zone at $94.61 to $93.10.
On the upside, the nearest resistance is a minor pivot at $99.69, followed by a short-term retracement zone at $103.16 to $106.68.
Trader reaction to the minor pivot at $97.00 is likely to determine the direction of the September WTI crude oil market into the close on Wednesday.
A sustained move over $97.00 will indicate the presence of buyers. Taking out the minor top at $99.00 will shift momentum to the upside with the next target a minor pivot at $99.69, followed by a pair of main tops at $100.99 and $102.00.
A sustained move under $97.00 will signal the presence of sellers. This could trigger a late session break into a minor retracement zone at $94.61 to $93.10, followed by a minor bottom at $93.01.
A trade through $93.01 could trigger an acceleration into the long-term 50% level at $89.54. This is the last potential support before the $88.23 main bottom.
James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.