Hi Traders! Oil forecast update and follow up is here. On November 12th I shared this “Crude Oil Technical Analysis And Forecast” post in my blog. In this post, let’s do a recap of this setup and see how it has developed now. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club. Spoiler alert – free memberships are available!
My Idea
Looking at the H4 chart we could see that currently there are no evidences that show this bullish trend is over. In addition to this the ADX indicator gave a bullish signal at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider this as evidence of bullish pressure. Also while looking at the Stochastic Oscillator we could see that the price has reached its extreme, we may consider this as yet another evidence of bullish pressure. Currently, it looks like a pullback is happening, once this pullback completes itself I expect the price to continue higher further.
Based on the above-mentioned analysis my view was bullish here and I was expecting the price to continue higher further after pullbacks. The price action followed my analysis here and the pullback that I was looking for happened. The price then moved higher as expected and provided a fantastic move to the upside.
The market provided with various facts supporting the bullish view on the H1 chart. The pullback happened as expected and the price reached a strong support zone and respected it. The price has also created a false break with bullish divergence between the first low at 40.15 and the second low at 40.08 based on the MACD indicator. The price then moved higher and broke above the last high at 40.82. We may consider these as facts provided by the market supporting the bullish view. Then as you can see in the screenshot below how the price moved higher after that. This is why we should always listen to the hints and facts provided by the market and take the right actions accordingly.
Currently, on the H1 chart, we have a bearish divergence in play based on the MACD indicator. This is something that we need to pay attention to. So if you are still involved in the buys then this is a good place to consider managing your trade and secure your profits (cash out or partial cash out or trailing protections or partial hedge, etc.. depending on the strategy that you work with).
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To your success,
Vladimir Ribakov
Certified Financial Technician
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