Crude Oil Price Forecast – October 27, 2020

WTI Crude Oil Technical Analysis and Short-Term Forecast

The near-term outlook for WTI remains bearish. Although WTI bounced today and settled above yesterday’s midpoint, the move up failed to close above yesterday’s open and held the 38 percent retracement of the decline from $41.9 at $39.7 on a closing basis. Also, the wave formation up from $38.28 stalled just below its larger than (1.618) target and this afternoon’s post-settlement decline has challenged the 62 percent retracement of the rise from $38.28. Finally, yesterday’s close below $38.8, the smaller than (0.618) target of the wave down from $42.02, has put odds in favor of testing the $36.8 equal to (1.00) target. This is in line with the double bottom that formed between the $37.11 and $36.93 swing lows. Therefore, closing below $36.8 will take out the double bottom and clear the way for a much more significant test of support.

WTI Crude Oil - $0.35 Kase Bar Chart
WTI Crude Oil – $0.35 Kase Bar Chart

That said, each time WTI has looked most bearish (or bullish) since early September the move has stalled and WTI has oscillated within the range between nominally $37.0 and $42.0. Also, given today’s close above yesterday’s midpoint, there is an outside chance for a larger test of resistance before WTI falls to challenge $36.8. Closing above $39.7 will call for key resistance at $40.5. This is the 62 percent retracement of the decline from $41.9. Settling above $40.9 will shift near-term odds back in favor of rising to $41.4 and eventually $42.0 where the $42.02 confirmation point of the double bottom would be tested.

Brent Crude Oil Technical Analysis and Short-Term Forecast

The near-term outlook for Brent is bearish after today’s move up held the 38 percent retracement of the decline from $43.57 at $41.5. The post-settlement decline implies that today’s move up is corrective of the recent decline. Tomorrow, look for a test of $40.2, the smaller than (0.618) target of the wave down from $44.3. Settling below this will clear the way for $39.4 and then $38.6.

Resistance at $41.5 should continue to hold. Closing above this will call for a test of key near-term resistance and the 62 percent retracement of the decline from $43.57 at $42.3. Settling above $42.3 is doubtful but would shift odds in favor of $43.2 and higher.

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.

Published by

Dean Rogers, CMT

Dean Rogers, CMT is the general manager of the Kase Call Center in Albuquerque, New Mexico. He oversees all of Kase and Company, Inc.’s operations including research and development, marketing, and client support. Dean began his career with Kase in early 2001 as a programmer but has developed into Kase’s senior technical analyst. He writes Kase’s award-winning weekly Crude Oil, Natural Gas, and Metals Commentaries. He is an instructor at Kase's classes and webinars and provides all of the necessary training and support for Kase's hedging models and trading indicators for both retail and institutional traders.

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