Hi Traders! Oil technical analysis and short term forecast post is here. We do our analysis on the MetaTrader4 platform (MT4), some very interesting, useful tips and hacks about the MT4 platform could be found here. As we do in every technical analysis post we are going to perform the multi-timeframe technical analysis on Oil in order to find possible trading opportunities. If you would like to learn more about the way we trade and the technical analysis we use then check out theTraders Academy Club Spoiler alert – free memberships are available! Let’s start our analysis now from the highest timeframe which will be the weekly chart here.
Oil W1(Weekly) Chart Analysis – Bullish Trend Pattern, Key Support Zone, Bullish Hidden Divergence
On the weekly chart, we could see that the price which was moving higher has created a bullish trend pattern in the form of three higher highs, higher lows, we may consider this as evidence of bullish pressure. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher. Currently, it looks like a correction is happening. Also, we have a key support zone that has formed, based on the 38.2%(80.858) – 50%(66.813) Fibonacci retracement levels of the bullish trend pattern. The price which was moving lower, reached this zone, respected it and is currently bouncing higher from this zone. In addition to this, the price has created a bullish hidden divergence that has formed between the first low that has formed at 62.339 and the second low that has formed at 76.053 based on the MACD indicator, which we may consider as evidence of bullish pressure. So everything looks good here for the bulls and we may now move down to lower timeframe and see if we can find evidences supporting this short term bullish view.
Oil H4(4 Hours) Chart Analysis – Bullish Trend Pattern, ADX Indicator, Two Strong Support Zones
On the H4 chart, the price which was moving higher has created a bullish trend pattern in the form of three higher highs, higher lows, we may consider this as evidence of bullish pressure. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher. Currently, it looks like a correction is happening. In addition to this, the ADX indicator gave a bullish signal here 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 yet another evidence of bullish pressure. Currently, it looks like a correction is happening. Also, we had two strong resistance zones that has formed and the price which was moving higher has broken above these zones and is holding above them. After the breakout these strong resistance zones are acting as two strong support zones for us. Until both these strong support zones shown in the image below holds my short term view remains bullish here and I expect the price to move higher further.
Technical Analysis & Forecast Summary
Oil W1(Weekly) Chart Analysis
- Bullish Trend Pattern, Key Support Zone, Bullish Hidden Divergence
Oil H4(4 Hours) Chart Analysis
- Bullish Trend Pattern, ADX Indicator, Two Strong Support Zones
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short term buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
