Hi Traders! Today I am sharing with you the Oil short term forecast and technical analysis 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. 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! Now, let’s start our analysis from the highest timeframe which will be the daily chart here.

Oil D1(Daily) Chart Analysis – Strong Resistance Zone, Bearish Hidden Divergence, Stochastic Oscillator

On the daily chart, after the strong bearish move currently it looks like a correction is happening and the price which is moving higher has reached a strong resistance zone. In addition to this, we could see that the price has created a bearish hidden divergence between the first high that has formed at 85.012 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, based on the Stochastic Oscillator we could see that the price has reached it’s extreme, which we may consider as yet another evidence of bearish pressure. So everything looks good here for the bears and we may now move down to lower timeframe and look for evidences supporting this short term bearish view.

Oil H4(4 Hours) Chart Analysis – Range, Key Resistance Zone, Stochastic Oscillator

On the H4 chart, currently it looks like the price is moving inside a range. This range is formed by the highs and lows reaching parallel support and resistance zones. The price which is moving inside this range has currently reached the top of it. Also, while measuring the first wave inside this range using the Fibonacci expansion tool we could see that the 100%(76.896) Fibonacci expansion level of the first wave coincides with the top of this range which makes this area a key resistance zone for us. The price which is moving higher has currently reached this key resistance zone. Also, based on the Stochastic Oscillator we could see that the price has reached its extreme here as well which we may consider as evidence of bearish pressure. Until this key resistance zone holds my short term view remains bearish here and I expect the price to move lower further. We may now move down to one more timeframe lower and look for evidences supporting this short term bearish view.

Oil H1(1 Hour) Chart Analysis – Bearish Divergence, Stochastic Oscillator

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.

Technical Analysis & Forecast Summary

Oil D1(Daily) Chart Analysis 

• Strong Resistance Zone, Bearish Hidden Divergence, Stochastic Oscillator

Oil H4(4 Hours) Chart Analysis 

• Range, Key Resistance Zone, Stochastic Oscillator

Oil H1(1 Hour) Chart Analysis 

• Bearish Divergence, Stochastic Oscillator

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 sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.

Also, don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.

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Arvinth Akash
Traders Academy Club Team.

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