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Crude Oil Price Update – Trader Reaction to $64.90 – $65.31 Should Determine Near-Term Direction
By: James Hyerczyk | May 14, 2021

• Aggressive counter-trend sellers could come in on a test of $64.90 to $65.31. They are going to try to form a potentially bearish secondary lower top.

U.S. West Texas Intermediate crude oil futures are edging higher on Friday shortly before the regular session opening. Helping to boost prices are a recovery in the U.S. stock market, optimism over the pace of the economic recovery, the opening of the Colonial Pipeline and a weaker U.S. Dollar.

At 08:50 GMT, July WTI crude oil futures are trading $64.31, up $0.47 or +0.74%.

Despite today’s early gains, the market is still poised to finish lower for the week. Gains may be being capped by the raging coronavirus in India and the possibility of a third-wave in Brazil. However, an optimistic demand outlook from OPEC and the IEA as well as a reported weekly drawdown by the U.S. Energy Information Administration (EIA) may have offset the negative developments.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through $62.82 will change the main trend to down. A move through $66.67 will signal a resumption of the uptrend.

The minor trend is down. This is controlling the momentum.

The short-term range is $60.55 to $66.67. On Thursday, the market found support at $63.12, inside its retracement zone at $63.61 to $62.89.

The minor range is $66.67 to $63.12. Its retracement zone at $64.90 to $65.31 is the next upside target. Trader reaction to this zone should set the tone next week.

The main range is $57.18 to $66.67. If the main trend changes to down then look for the selling to possibly extend into its retracement zone at $61.93 to $60.81.

Daily Swing Chart Technical Forecast

July WTI crude oil found support inside $63.61 to $62.89 on Thursday. Crossing to the weak side of this retracement zone will indicate the selling pressure is getting stronger. A move through $62.82 will change the main trend to down. This could trigger an acceleration into $61.93 to $60.81.

Since the trend is up, the early buying could trigger a surge into the minor retracement zone at $64.90 to $65.31. Trader reaction to this zone should determine the direction of the market next week.

Aggressive counter-trend sellers could come in on a test of $64.90 to $65.31. They are going to try to form a potentially bearish secondary lower top. This could eventually lead to a change in trend.

Buyers are going to try to drive the market through $65.31. They will be trying to take out $66.67, while making $63.12 a new main bottom.

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