In today’s oil price forecast, I decided to share with you my insights from today’s Oil Trading Alert. Have a nice read!
November 22, 2024
Combination of retracements, the gap and potential scenarios.
Technical Picture of Crude Oil
Let’s start today’s analysis by quoting the last Oil Trading Alert:
(…) What can we expect next?
Taking into account today’s pro-growth gap, effective defense of the aforementioned 38.2% Fibonacci retracement and the buy signals generated by the indicators (both, daily and 4-hours), it seems that further improvement is very likely – especially if the bulls break above the barrier of $70.
If they successfully push the price above this resistance, we’ll likely see a test of the red resistance zone (marked on the 4-hor chart) created by the 61.8% Fibonacci retracement (based on the entire Nov.7-Nov.18 downward move) and the red gap ($70.25-$70.38) from Nov.11 in the very near future.
At this point it is also worth keeping in mind that slightly above it, oil bulls will have one more resistance to overcome – the 38.2% Fibonacci retracement (based on the entire Oct.8 – Nov.18 downward move) at around $70.87, which seems to be the last stop blocking the road to even higher prices.
Looking at the daily chart, we see that the situation developed in accordance with the pro-growth scenario and the bulls reached the mentioned targets.
From today’s point of view, we see that thanks to yesterday’s upswing crude oil futures finished the day above the previously broken barrier of $70. This positive development encouraged the bulls to push the price even higher during European trading hours.
Although the futures extended gains and climbed above the upper border of the mentioned red gap from Nov.11, the 38.2% Fibonacci retracement remained unconquered (at least at the moment of writing these words).
How did this price action affect the 4-hour chart?
From this perspective, we see that thanks to the recent upward move, crude oil futures have also climbed to the red resistance zone, which continues to block the way to the north.
What’s next?
If the bulls close ranks and manage to close the gap, we could see at least a test of the upper border of the green rising wedge in the coming day(s).
However, taking into account the importance of the above-mentioned resistances and the current position of the 4-hour indicators, it seems that the correction of the recent upward move may be just around the corner.
Nevertheless, in my opinion, such price action will be more likely and reliable if the sellers successfully push the price under the lower border of the mentioned green rising wedge.
If we see such price action, the first target for the bears will likely be the 38.2% Fibonacci retracement (based on the entire recent upward move) at around $69.10. If this support is broken, the way to the 50% Fibonacci retracement and the Nov.20 low will be open.
What could happen if the bulls fail here?
In this case, we could see not only a test of the 61.8% retracement but also a slide to around $67.60, where the size of the correction would correspond to the height of the mentioned green rising wedge.
Therefore, in my opinion, keeping an eye on the lower border of the rising green wedge and the red gap from Nov.11 could be the key to further profitable trades.
Summing up, crude oil futures closed Thursday above the barrier of $0, which triggered an unsuccessful attack (at least the moment of writing these words) on the 38.2$ Fibonacci retracement. This price action translated into a pullback and a comeback below the mentioned red gap from Nov.11, which, together with the current position of the 4-hour indicators, suggests that correction of the recent increases may be just around the corner – especially if the bears manage to push the price under the lower line of the green rising wedge seen from the 4-hour perspective. Therefore, in my opinion, keeping an eye on this key support line could be the key to further profitable trades.
Have a profitable day and a wonderful weekend and see you on Monday.
Thank you for diving into today’s oil price insights. If you’d like to access even more timely updates and trading tips, consider trying our Oil Trading Alerts—a premium service designed to keep you one step ahead in the oil market. For a limited time, you can start with a free 16-day trial, giving you a risk-free way to explore the full benefits our premium subscribers rely on. Don’t miss out on staying informed and ready to act as market shifts happen. Start your free trial today!
Anna Radomska