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Crude Oil Forecast: The upside is capped but the downside is empty

Crude Oil Forecast: The upside is capped but the downside is empty

I tried to explain potential medium-term price action in my latest video posted on October 27th.

The price fell to 53.70 as predicted but recovered by the news about the trade wars.

I have posted my general overview on Tradingview.

Oil Price = SUPPLY vs DEMAND

Major / Longer Term Fundamentals ( Which can not be changed by daily news/manipulations )

Supply:

1.OPEC cuts production. Russia is not so eager to meet OPEC cut target. See the latest Reuters News:
Russian oil output down in October, but misses OPEC deal target https://reut.rs/2NbHRPC
2. Sanction to Iran and Venezuela… ( Remember, Russia is in Venezuela now )
3. Potential China- Iran Oil agreement

Demand:

Lack of Demand… WTO, IMF, IEA even OPEC lowers Global Growth and Global Oil Demand forecasts.

Near Term Fundamentals and questions :

1.Trade Wars: If there is a real deal to be done: Who guarantees the deal to be held? Is this potential deal gonna help an increase the Global Oil demand? If yes, how?
2. Talking about the Supply, even a Dron attack to the World’s one of the biggest oil supply facilities could not send the prices above 62 $.
3. ARAMCO IPO: Reuters ” Saudi Arabia’s Crown Prince Mohammed bin Salman on Friday agreed that the initial public offering of state oil giant Aramco will be announced on Sunday, five sources familiar with the matter told Reuters.”… It is understandable that the Saudi Family and their partner Mr. Trump will try to send prices higher. On the other side, higher oil prices may help inflation in the US. But, above 60 $ is SOS.
4. Bubbles in Indices and Oil …so prices may go up a bit more

Let us check the levels and patterns now:

As I have published in my latest video, a potential bearish flag pattern is being formed in the bigger charts.

On the H1 chart, we have two bearish harmonic patterns: Bearish Crab at 56.62 and Bearish Shar Pattern at 5725.

If the price breaks and closes above 56.60-57.20 zone are likely to be tested.

These levels can be used as a selling opportunity.

The big pattern would be valid as soon as the price breaks and close above 53.13. 51.56 and 50.20 would be the first sub-targets of the Crude Oil Prices.

The downwards breakout of the 50.00 neckline would accelerate the sell-off. Our longer-term targets are: 48.40  46,80 and 43.75.

The interactive charts with entry alerts have been updated.

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DISCLAIMER: This is a technical analysis study, not advice or recommendation to invest money

Crude Oil Forecast: Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. Chartreaderpro does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility

 

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