WTI Crude Oil
The near-term outlook for WTI crude oil leans negative. Today’s long upper shadow and close below $50.0 does not bode well for bulls. Even so, major support at $49.3, the smaller than (0.618) target of the primary wave down from $71.83 has held so far. Therefore, there is still a reasonable chance for a larger upward correction before falling to a new low.
The intra-day waves down from $52.2 met targets at the $49.42 swing low that connect to $48.7 and lower. In addition, the small waves down from $50.69 call for another test of $49.3. There is immediate support at $49.6 but $49.3 is key. A close below $49.3 will be long-term bearish and open the way for the next leg lower.
This is a tight call for the near-term though due to the importance of $49.3. Oversold daily and weekly momentum and intra-day Kase StatWare buy signals suggest the upward correction might extend first. Overcoming $50.6 early tomorrow will increase odds for key near-term resistance at $51.2. Closing above $51.2 would call for a larger test of resistance at $51.9 and possibly $52.2 during the next few days.
Brent Crude Oil
The outlook for Brent remains negative but a daily bullish Harami pattern, daily RSI divergence, and the wave formation up from $53.11 imply that a larger upward correction might unfold before prices fall to a new low.
Nevertheless, while $54.9 resistance holds the small wave formation down from $54.69 favors $53.7, which then connects to $53.2 and lower. Should Brent overcome $54.9, look for a test of key near-term resistance at $55.5. Settling above this would clear the way for $56.0 and higher during the next few days.
This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.