Oil Short Term Forecast Update And Follow Up

Hi Traders! Oil short term forecast update and follow up is here. On January 4th I shared this “Technical Analysis – Oil Short Term Forecast” post in our 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

On the the H1 chart, we could see that the price which is moving higher has created a bearish divergence between the first high that has formed at 76.740 and the second high that has formed at 77.247 based on the MACD indicator, which we may consider as evidence of bearish pressure. Also, this bearish divergence supports the daily bearish hidden divergence which makes this bearish view stronger. Also, based on the Stochastic Oscillator we could see that the price has reached its extreme here as well, this means that the price has reached it’s extreme in three consecutive timeframes which is another good signs favoring the bears. Until the H4 key resistance zone holds my short term view remains bearish here. If we get a valid breakout below the 74.00 level we may then consider it as a validation for the bearish view and may expect the price to move lower further.

Oil H4(4 Hours) Chart Current Scenario

In Oil based on the above-mentioned analysis, my short term view was bearish until the H4 key resistance zone holds. Also, I mentioned that “If we get a valid breakout below the 74.00 level we may then consider it as a validation for the bearish view and may expect the price to move lower further”. The price action didn’t follow my analysis here, the validation for the bearish view which is a valid breakout below the low at 74.00 didn’t happen. Currently the price has moved higher, broken above the key resistance zone and is holding above it, which is a contradictory sign opposing the bearish view. My current view on Oil is neutral.

Even though we had facts supporting the bearish view here, the validation for the bearish view which is a valid breakout below the low at 74.00 didn’t happen here. Alternatively the price moved higher, broke above the H4 key resistance zone and is holding above it which we may consider as a fact provided by the market opposing this bearish view. This is why we should always trade based on the facts and hints provided by the market and take the right actions according to that. So traders, when it comes to trading, there are various important factors that we need to pay attention to, just because we have a good setup doesn’t mean that we can enter the trade randomly and it will pay us huge profits. First of all, we need to validate the entry and we should have a perfect entry plan to get into the trade which is a key factor when it comes to trading. This Oil short term forecast is yet another good example of this scenario.

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Arvinth Akash
Traders Academy Club Team

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Arvinth Akash