U.S. West Texas Intermediate crude oil futures are trading lower early Thursday after posting an outside move, closing price reversal top the previous session. The chart pattern doesn’t change the main trend to down, but if confirmed, it could signal the start of a 2 to 3 day counter-trend sell-off.
On Thursday at 13:34 GMT, December WTI crude oil futures are trading $76.64, down $0.42 or -0.55%.
Oil prices fell on Wednesday after an unexpected rise in U.S. crude stocks raised concerns over demand after prices rallied to multi-year highs.
U.S. crude inventories rose by 2.3 million barrels last week, the U.S. Energy Information Administration (EIA) said, against expectations for a modest dip of 418,000 barrels. Gasoline inventories also rose, while distillate inventories were down slightly.
Daily December WTI Crude OilDaily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum may be getting ready to shift to the downside with the formation of the closing price reversal top on Wednesday.
A trade through $76.48 will confirm the closing price reversal top and signal the start of a 2 to 3 day correction.
A move through $79.39 will negate the closing price reversal top and signal a resumption of the uptrend. Taking out $72.82 will change the main trend to down.
The minor range is $72.82 to $79.39. Its 50% level or pivot at $76.11 is the first downside target.
The short-term range is $69.05 to $79.39. Its retracement zone at $74.22 to $73.00 is the primary downside target area.
The main range is $61.11 to $79.39. If the main trend changes to down then look for the selling to continue into its retracement zone at $70.25 to $68.09.
Daily Swing Chart Technical Forecast
The direction of the December WTI crude oil market on Thursday is likely to be determined by trader reaction to the pivot at $76.11.
A sustained move under $76.11 will indicate the presence of sellers. If this move is able to generate enough downside momentum then look for a possible plunge into $74.22 to $73.00.
Since the main trend is up, look for buyers on a test of $74.22 to $73.00. They are going to try to defend the main bottom at $72.82. If this price fails, then the main trend will change to down.
A sustained move over $76.11 will signal the presence of buyers. This could trigger a rebound rally into $77.75. Overtaking this level will indicate the buying is getting stronger with $79.39 the next likely upside target.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
More From FXEMPIRE:
Natural Gas Price Fundamental Daily Forecast – EIA Could Report a Triple-Digit Storage Injection
Gold Price Futures (GC) Technical Analysis – Trend Changes to Up on Trade Through $1771.50
AUD/USD Forex Technical Analysis – Trend Changes to Up on Move Through .7304
NZD/USD Forex Technical Analysis – Strengthens Over .6924, Weakens Under .6921
U.S. Dollar Index (DX) Futures Technical Analysis – Needs to Hold 94.100 to Sustain Upside Momentum
Economic Data Puts the EUR, the Loonie, and the Greenback in Focus