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On July 30, crude oil left a bearish GAP. In our previous articles, we had indicated a strategy that crude should reach that level and cover this gap, you can review the details here.
The daily chart of Crude Oil is showing a bullish scenario. The price has been rising for three days since it made a rebound in the 21-moving average around 69.39. It is about to close the Gap that left on July 30 at 73,79. We believe that in the next few days it will try to close that GAP.
According to the daily chart, there is a bullish channel that is projected from the low of 61.72 and maintains the uptrend of oil prices. However, WTI could be reaching the overbought level because the 7/8 line of murray represents a reversal zone, so it will be better to wait for a correction.
Therefore, if crude fails to consolidate above 73.44, it will be a good opportunity to sell with targets up to the 6/8 support located at 71.88, but it would leave the target of covering the GAP at 73.79 pending.
On the other hand, crude inventories in the US decreased by -3.5 million barrels in the week ending September 17. This data gave the momentum to Crude to break the resistance of 71.88 (6 / 8) and continued to rise until yesterday it closed above the 73.00 price level of July 30. It means that in the medium term it may reach the psychological level of 75.00.
Our outlook continues to be bullish for Crude Oil, as long as it remains above 70.21 where there is the SMA of 21, higher is the level of 71.88. At that same level, the lower line of the bullish channel converges, hence a fall towards these levels would be a good opportunity to buy.
On the contrary, a sharp break below the psychological level of 70.00 will be the beginning of a bearish scenario and crude could fall again to the pivot point of 68.75. If the downward pressure prevails, it could fall quickly to the EMA of 200 located at 64.10.
Support and Resistance Levels for September 24 - 27, 2021
Resistance (3) 74,91
Resistance (2) 74,65
Resistance (1) 73,93
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Support (1) 72,77
Support (2) 71,88
Support (3) 71,30
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Trading tip for CRUDE OIL for September 24 - 27, 2021
Buy if rebound 71,88 (6/8) with take profit at 73,44 and 74,25, stop loss below 71,28.
Sell below 73,44 with take profit at 72,90 and 71,88 (6/8), stop loss above 74,00.
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