Hi Traders! Today I am sharing with you the Oil technical analysis and forecast post. In Oil, based on the multi-timeframe analysis method, we are going to look for the evidences on three timeframes that is on the current trading timeframe and two timeframes higher, when we get evidences that support our view on these three timeframes this makes the setup very reliable.We do our analysis on the MetaTrader4 platform (MT4). Some very interesting useful tips and hacks about the MT4 platform could be found here. 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! Let’s start our analysis now from the highest timeframe which will be the weekly chart here.

Oil W1(Weekly) Chart Analysis – Higher Highs, Bullish Hidden Divergence, Stochastic Oscillator

On the weekly chart, we could see that the price which was moving higher has created higher highs based on the MACD indicator which is a sign of gaining momentum towards the bullish side. Currently, it looks like a pullback is happening with the price creating 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 85.338 based on the MACD indicator which we may consider as another evidence of bullish pressure. Also, based on the Stochastic Oscillator we could see that the price has reached its extreme which we may consider as yet another evidence favoring this short term bullish view. So everything looks good here for the bulls and we may now move down to lower timeframe and look for evidences supporting this bullish view.

Oil D1(Daily) Chart Analysis – Key Support Zone, Bullish Convergence

On the daily chart, the price which was moving lower reached a key support zone that has formed based on the 100%(87.144) Fibonacci expansion level of the first wave. The price respected this key support zone and has currently bounced higher from this zone. In addition to this, we could see that the price which was moving lower created a bullish divergence that has formed between the first low that has formed at 86.348 and the second low that has formed at 85.338 based on the MACD indicator. The price then moved higher and broke above the last high at 94.248 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence. Hence as per the book scenario, after a bullish convergence, we may look for corrections to happen and then further continuation to the upside. So the bottom line here is that the daily chart has evidences supporting the bulls and we may now move down to one more timeframe lower and look for evidences supporting this bullish view.

Oil H4(4 Hours) Chart Analysis – Bullish Divergence, Higher Highs, ADX Indicator

On the H4 chart, the price which was moving lower created a bullish divergence which has formed between the first low at 86.348 and the second low at 85.338 based on the MACD indicator. The price then moved higher and has created higher highs. Also, we should note that the price which was in a bearish trend so far creating series of lower highs, lower lows has created higher highs for the first time in a while which we may consider as sign of a possible trend change. We may consider these as evidences of bullish pressure. 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. Until the key support zone (marked in blue) shown in the image below holds, my view remains bullish here and I expect the price to move higher further.

Technical Analysis & Forecast Summary

Oil W1(Weekly) Chart Analysis 

• Higher Highs, Bullish Hidden Divergence, Stochastic Oscillator

Oil D1(Daily) Chart Analysis 

• Key Support Zone, Bullish Convergence

Oil H4(4 Hours) Chart Analysis 

• Bullish Divergence, Higher Highs, ADX Indicator

Trading Tips

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