New Crude Oil levels are defined

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Crude oil futures continue to surprise to the upside as three major factors remain the bullish catalyst. First from the supply side we are seeing continued drops in week inventory data as well as in rig counts. This could lead to a rebalancing in the total U.S. supply and bring it back to more normalized levels. Secondly once the U.S. and China come to an agreement on trade negotiations this should ignite the Chinese economy and therefore boost demand. Finally, from a technical perspective there is an upside breakout on the charts which could clear the way to the 200-day moving average. I have outlined some key levels of support and resistance below as well as a chart.

Two Key Levels of resistance are $60.00 and $60.93

*$60.00 Key psychological level

*$60.93 is the 200 DMA

Two Key Levels of support are $57.86 and $54.52

*$54.52 was the washout low from March 8th

*$57.86 was old resistance and is now new support

There are many different types of fundamental and technical chart patterns market technicians focus on when making trading decisions and multiple ways to interpret them. This is why technical analysis is an art form. The Key is to be able to recognize these patterns and implement a trading strategy based on what you believe the charts are telling you are going to happen next. As a trader it is important that you have a good understanding of the basic patterns before you can develop a strategy to give you a potential edge. When you combine a couple of these different methods, you really unlock the power of technical analysis.

If you would like assistance with technical analysis I highly recommend that you register for our new guideTop 5 Technical Indicators for Futures Trading

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This is just a brief overview of one of the five basic chart types; there are more many more complicated patterns you can learn about and perhaps incorporate into your trading. And of course, each individual will interpret what he/she sees on the chart in a unique way.

BY: Phillip Streible


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