WTI Crude Trade Plan (Read this section carefully for trade entry/exit suggestions)
Nov 21st 2016 Updated at 11:33 pm EST on Nov 20th 2016
For Fri, Nov 18th, I’d written “…For the upside forecast today, if we hold the initial support line at 44.80~44.70 we will run into a thin wall of resistance in the 45.45~45.50 area which acted as support in yesterday’s session. We run into a more fortified resistance about 10-ticks lower than yesterday in the range of 45.90~46.00.”. We ticked higher into the close driven more from fundamental reasons from OPEC leaders voicing support on the possibility of agreement from members of a production cut in Vienna later during the month.
For the upside forecast today, we have gapped higher and the lows here have converted Friday’s resistance to support. Holding above 46.60~46.70 for keeps the short-term outlook positive & targets quite strong resistance at 47.50~47.60. I consider this as reasonable starting point for a wall of resistance for this week with the contract rollover to January and leveling out under short-term overbought conditions is entirely possible here. If this were to happen, we’d slide easily back to or below support between 46.60~46.50. A break above that 47.50~47.60 level on good volume and a close above there changes us to a good buy signal even with overbought conditions prevailing. From here we could quite easily accomplish 48.50~48.60 to 48.80 and the 49.20~49.30 all within the sustained bullish sentiment and a squeeze of shorts.
Initial support now moves to 46.60~46.70 but below here targets 46.25~46.30. On the outside chance that we chisel deeper into losses look for strong support again at 45.60~45.70. Attempting longs here wouldn’t entirely be a bad idea despite overbought conditions but have stops wide at around 45.20 since a break lower on some strong posturing by any of the OPEC standouts could send us right back to think support in the 44.55~44.60 areas on to 44.20 from there for the week.
Cam Pivots for Nov 21st, 2016
R3=47.29 | R2=46.82 | R1=46.54 <-> S1=45.98 | S2=45.70 | S3=45.23
News & Analysis with a focus on Asia & US Inventory recap
Nov 21st 2016 Updated at 10:33 pm EST on Nov 120th 2016
Oil prices rose around 1 percent on Monday as producer cartel OPEC moved closer to an output cut to rein oversupply that has kept prices low for over two years. International Brent crude oil futures were trading at $47.35 per barrel at 7.23 p.m. EST, up 49 cents, or 1.05 percent, from their last settlement. WTI crude was up 0.98 percent, or 44 cents, at $46.14 a barrel.
Traders said that markets were being supported by advancing plans by the OPEC to cut production in a bid to prop up the market following over two years of low prices because of output exceeding demand. Such a deal has proved tricky to agree as some producers, most notably Iran, have been reluctant to cut output. But an agreement has become more likely as Iran, keen to increase output after international sanctions against it were lifted last January, was expected to be given an exemption if it agrees to cap its production rather than cutting it, leaving the onus of a an outright reduction on other OPEC-members, including its political rival and de-facto OPEC-leader Saudi Arabia. Beyond the talk of a potential production cut, there were also signs of ongoing market weakness. Japan, the world’s fourth biggest oil consumer, on Monday reported a fall of 9.5 percent in crude oil imports in October from the same month a year earlier, to 2.78 million barrels per day.
WTI Crude Weekly Chart Analysis