Are Crude Oil Futures Getting Ready to Bounce?
Crude oil futures have gone pretty much nowhere since November. But how long will that remain the case?
The first pattern on this weekly chart is the price level round $64.31. Highs occurred there in 2019 and 2020, representing peaks for the pre-Covid bear market.
CL1! spent most of the following year breaking that resistance before surging in early 2022. It subsequently pulled back and bounced at the same level on March 20 and May 4. That’s a potential double-bottom (spanning two quarters) at a price area with long-term importance.
Next, prices have been stuck between roughly $64 and $82 for about 26 weeks. They formed a similar sideways range between June and November 2020 before rallying.
Finally, some factors off the chart could favor crude. Several reports (Bloomberg, Standard Chartered and Reuters) have noted heavy bearish positioning by hedge funds. Will that force buying? Saudi Arabia’s energy minister also said there could be more bullish surprises before OPEC’s June 4 policy meeting. Finally, Baker Hughes rig counts fell to a yearly low last week -- a sign of waning production in the U.S.
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Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
The first pattern on this weekly chart is the price level round $64.31. Highs occurred there in 2019 and 2020, representing peaks for the pre-Covid bear market.
CL1! spent most of the following year breaking that resistance before surging in early 2022. It subsequently pulled back and bounced at the same level on March 20 and May 4. That’s a potential double-bottom (spanning two quarters) at a price area with long-term importance.
Next, prices have been stuck between roughly $64 and $82 for about 26 weeks. They formed a similar sideways range between June and November 2020 before rallying.
Finally, some factors off the chart could favor crude. Several reports (Bloomberg, Standard Chartered and Reuters) have noted heavy bearish positioning by hedge funds. Will that force buying? Saudi Arabia’s energy minister also said there could be more bullish surprises before OPEC’s June 4 policy meeting. Finally, Baker Hughes rig counts fell to a yearly low last week -- a sign of waning production in the U.S.
Trading futures just got more accessible after TradeStation slashed commissions! Click our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing in cryptocurrencies involves significant risks. Please click here for TradeStation Crypto’s risk disclosures on investing and trading in cryptocurrencies.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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