Somewhat of a surprise that with all the Geopolitical unrest, there is plenty….that Crude Oil futures are heading lower.
Between Gaza/ Israel, North Africa, Ukraine, one would think there is enough risk that some premium would build into crude oil future pricing but that is not the case. When I started in the commodity business in 1998, a veteran once told me that if the “news/rumors” are bullish but market reaction is bearish – watch out as they may be more pressure on the market.
Since then I have learned that it would almost be impossible to have a good grasp about the fundamentals that affect about 25 commodity markets I follow on a daily basis so my focus shifted into technical analysis.
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Below you will see the weekly chart for crude oil futures. Using Fibonacci extension I try to predict support and resistance levels along with potential targets for the move. As I see the market right now, we are about to test MAJOR support level at 97.20. This level held back mid March of this year and last week. A break below this level and a daily close below 97.20 would suggest that a test of 91.22 is near. On the flip side if this level holds and the market has enough bounce in it to go above 99.71 we may see a reversal to the upside. As I mentioned earlier, there are plenty of Geopolitical risks out there and i would personally try to measure my risk by either using options as protection, perhaps consider spreads and regardless use a stop order if and once I entered a position. For more information about Crude Oil Futures Trading visit our website.
Disclaimer – Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. Past performance is not indicative of future results. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.