Crude Oil – Support and Resistant Levels

The above is the daily chart of Crude Oil. Few observations on crude oil price movement:

1. In the daily chart, Crude Oil formed an ascending channel which indicates an uptrend. Nevertheless, if we look at the weekly chart as below, the long term trend of crude oil is still bearish.
   
2. Refer to the daily chart, we can find the immediate resistance levels
   1. 200 SMA – USD46
   2. Fibonacci retracement 50% – USD45
3. If Crude Oil can break USD45-46 and form a support there, in my opinion, this is a solid medium-term bullish reversal.
4. The next strong resistance zone is highlighted with a rectangle box in the daily chart. The zone is from USD53 to USD59. It is still premature to say whether Crude Oil has sufficient momentum to break this zone.
5. To gain momentum, Crude Oil should form a strong support zone above USD46.

My forecast:

1. Crude Oil will not break the ascending channel immediately. I think the prices will move in the channel for a while. How long? I don’t know exactly, but I guess few weeks. Crude Oil needs to accumulate momentum to break USD45-46.
2. I think that Crude Oil will eventually form a support zone above USD46.
3. I don’t think Crude Oil can break the resistance zone USD53-59 within 2 to 3 months. This resistance zone is pretty strong.
4. Therefore, I forecast that Crude Oil prices will range between USD46 to USD50 in the next 2-3 months.

This is my view in forecasting medium term price movement of Crude Oil. Accuracy is unknown. If my forecast turns out to be correct, it is just lucky.

https://lcchong.wordpress.com/2016/04/28/crude-oil-support-and-resistant-levels/