WTI Crude Oil Technical Analysis and Short-Term Forecast
WTI crude oil broke higher out of an intra-day coil pattern (dark blue dotted lines) and settled the day above the $38.1 smaller than (0.618) target of the primary wave up from $36.13 (red). The $38.1 level was also the midpoint of the September 8 candlestick. This was positive for the near-term outlook and calls for a test of $39.0 tomorrow. However, $39.0 will likely hold.
The $39.0 objective is extremely important for the near-term outlook because it is the equal to (1.00) target of the primary wave up from $36.13 (red) and the 38 percent retracement of the decline from $43.78 (pink). Settling above this would warn that the recent move down might already be complete and would call for a test of $40.0 and higher.
Nevertheless, aside from today’s move up, the rise from $36.13 has been extremely shallow and choppy. Therefore, this move is most likely corrective. Additionally, the move up from $36.13 could form a bearish flag pattern if $39.0 holds. This is because a trend line parallel to the lower trend line of the coil (gray dotted line) will intersect with $39.0 tomorrow.
Once $39.0 is met, odds for a test of $37.6 will increase. Holding $39.0 and settling below $37.6 will confirm that a flag is forming and will call for a test of $37.1. This is currently the 62 percent retracement of the rise from $36.13 and is in line with the potential flag’s lower trend line. Settling below $37.1 will call for another test of $36.0.
Granted, $36.0 was and still is, major support for the longer-term outlook. Therefore, the move down might be complete. However, the fate of WTI’s near-term outlook will be determined by holding or closing above $39.0 tomorrow.
Brent Crude Oil Technical Analysis and Short-Term Forecast
Brent formed a double bottom around $39.3 that will be confirmed by a close above the $41.20 swing high. The target of the double bottom is $43.1. Based on the waves up from $39.30, Brent should rise to $41.3 tomorrow. However, an immediate close above this (and the $41.20 swing high) will likely be a challenge because $41.3 is the 100-day moving average.
Once $41.3 is met, odds for a test of $39.9 will rise. Settling below $39.9 would imply that a rectangle pattern is forming instead of a double bottom. This pattern would be bearish for the outlook rather than bullish. In this case, odds would shift in favor of testing $39.3, a close below which would call for the move down from $46.61 to continue.
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