|Key Levels||3838, 3910, 3970, 4150, 4296|
|Key Levels||3607, 3550, 3460, 3320|
Poor data on Factory Orders published on Monday in the United States was the reason for the emergence of negative dynamics.
In turn, the instrument is supported by the tense situation around Venezuela, against which the US may impose sanctions. Additional support comes from OPEC, as the cartel intends to continue to cut oil production in order to stabilize supply and demand in the market.
The report of the American Petroleum Institute reflected a moderate increase in oil reserves, which did not contribute to the development of “bullish” trend of the instrument. Over the week up to February 1, US Crude Oil Stock grew by 2.514M barrels after an increase of 2.098M barrels in the previous period.
Current trend (Down)
According to EMA cross in daily, crude oil major trend still running downtrend. The 50 EMA is running below 150 EMA means downtrend is prevailing. But minor trend is just placing uptrend at the price of 3810.
Pattern (Probability to create Head and Shoulder)
After topping on Oct 3rd 2018, at 5669 crude price was continuously falling to the price of 3469. Dec 4th crude given retracement and created a new high at the price of 3867. On 26 Dec 2018 its record a new low price 2995. After bottoming the level of 2995. crude created a new high at the price 3902 on Jan 21st 2019. and giving retracement to 3662 on Jan 28th and forming a head and shoulder pattern.
Support and resistance
EMA 20 and 50 in D1 chart show strong support. The price range is almost unchanged, significantly limiting the prospects for further growth of the instrument. %R trying to reverse toward -20 zone. And having formed a weak sell signal (located below the signal line). The development of a full-fledged downtrend is possible in the short and/or ultra-short term.
Resistance levels: 3901, 4016, 4154
Support levels: 3747, 3604, 3461
To open long positions, one can rely on the rebound from the support level of 3747 with the subsequent breakout of 3901. Take profit — 4016 or 4154. Stop loss — 3747.
A breakdown may be a signal to further sales with target at 3604 or 3461. Stop loss — 3904.
Implementation time: 2 to 3 week.