*My final live market update for this year, explaining the US Oil charts and trading opportunities*
This is going to be my final US Oil commodity market update for the year. Following on from my previous US Oil market updates, I will review what price has done over the past few days and weeks and show you how I am trading the commodity aswell as how you could trade it going forward.
As always, all my technical analysis and charting is done using the fantastic TradingView platform and I highly recommend it to anyone who is in need for charting software. You can get to their website by clicking on the link below.
Let’s get right in to it and look at the 4hr timeframe chart. This is the main timeframe I am using for my intraday buying and selling of US Crude Oil.
It is clear to see that price has remained bullish since the beginning of Q4 2019 with price finding support at $52 per barrel and then steadily climbing since. We have seen consecutive higher highs and higher lows forming with nice bullish waves and a clear bullish trendline supporting price as it goes.
This is probably one of the best examples of simply buying the lows and trading with a trend. By just using the trendline tool, fibonacci retracement levels and intraday support zones you could have easily found 3 or more long positions entries with very good reward:risk ratios.
Top Tip: If you find good examples of trades, save screenshots of them and create a database of trade samples you can refer back to in future. It will help you to remember what works and what doesn’t when analysing the markets.
The daily chart shows my profit taking level more clearly. I am looking to take profit at $60/$60.80 per barrel because price has failed to close above this level twice in recent months and there is a higher timeframe bearish trendline approaching from there.
You can also see much more clearly how the $52 per barrel price zone has held strong multiple times in the last 6 months of this year and has provided some nice buying opportunities.
Basic Fundamentals Affecting US Crude Oil Prices:
The 2 main causes for big moves in the price of US Crude Oil is supply/inventories and global economic events.
If supply of Oil increases sharply and inventories increase then the price of US Crude Oil drops, this is basic supply and demand. Likewise, if production of Crude decreases and stock piles fall then the price of Crude will rise.
Inventories of Crude Oil can also be effecting by disasters, both natural and man made. More recently we saw drone attacks on Saudi oil refineries that caused stock piles to fall sharply and the price of oil to jump up 14% over night!
If there is a large spike in risk off mentality due to global worries then US Oil prices tend to sell off because it is considered to be a much riskier investment compared to feed income. Capital will flow out of commodities like Crude Oil and stocks and into Gold, bonds, safe haven currencies etc.
These are just a few of the more fundamental causes of price moving US Crude Oil but there are many more. Interest rates, m base currency values and trade deals all have an effect on price.
Retail Trading Sentiment:
As it stands, 63% of retail traders using the IG brokerage system are shorting US Oil at these price levels so I am still happy to continue buying US Crude Oil up to $60 zone and higher.
If you haven’t read my previous blog posts on how to use retail trading sentiment data in your analysis then click on the link below.
Future Price Predictions & Trading Opportunities:
Crude Oil is coming close to my target price of $60.80 per barrel so I am looking to lock in most of my profits now. That being said, price could quite easily pullback from here and sell off again. If this happens, I will again look to buy in on the next dip and ride the next bullish price wave.
The 4hr chart above shows potential scenarios for the net few days. Price is looking very bullish today it might break the weekly highs of $59.80 and reach my profit target. If not, the resistance might hold again and price can drop back down to the support bullish trendline for one last bullish wave.
The yellow area shows my ideal buy zone for more long positions if prices sells off this week.
All my technical analysis is done using the TradingView platform. You can get access via the link below.
My preferred broker of choice is IC Markets. Low spreads and trading costs really help long term profitability. A link to their site is below.
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DISCLAIMER: None of the information posted on this site is to be considered investment/financial advice. Trading is high risk and you should only trade with money you can afford to lose.