In the world of commodities trading, few assets hold as much significance as WTI Oil. As a major benchmark for crude oil prices, WTI (West Texas Intermediate) is closely monitored by traders, investors, and analysts worldwide. Recent developments have brought attention to the market as WTI Oil tests a key support level at $80.50. This article will delve into the significance of the tested support level and the potential implications for the market. Let’s explore the current state of WTI oil and its prospects.
We all use technical analysis as an essential tool for traders and analysts to understand price patterns and make informed decisions. By examining charts and indicators, market participants, if they know how can identify key support and resistance levels. In the case of WTI Oil, the current testing of the $80.50 support level is a critical juncture for the market. Falling below this level and further below 66.20 as it is shown on the monthly chart below, could indicate further downward pressure on prices, potentially leading to a bearish trend. Conversely, a bounce back from this support level could suggest a potential reversal extension in the short-term third Elliott wave and the long-term fifth Elliott wave for WTI oil.
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The Weekly WTI Oil chart reveals the ongoing uptrend channel and a confluence of the support at the 76-80 zone. A break below 77 is required to invalidate the immediate upside extension and deny the third wave continuation higher, and we are seeing a test of the consolidation triangle. It is advisable to position yourself in just one trade direction and not to try to catch every swing. We need to see a bounce off this zone to extend higher. If we get a bounce this will be a perfect long trade opportunity but we need to wait for a proper price action or a break above 85.
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How to trade this?
While expert opinions and trading strategies vary, market participants must consider a wide range of factors to navigate the complex landscape of WTI Oil trading. As the market evolves, stay abreast of the latest developments and maintain a balanced approach as we trade days and weeks ahead.
It is a fact that a strong upside support for Q4 is 84. If we get a confirmed bounce from here and a break above the 84 we could see an extension higher to 100 again. Near-term, long-trade entries have a higher probability of success but for the conservative traders upon a break above 84. Less conservative traders can open the long trade here with a bit of risk and stop the loss below 77. You can trade this price action with the options as well.
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