After this weeks bounce from its April 10th low of $100.68 a barrel on the May crude oil contract, WTI seems to be cooling off. China’s GDP expanded at a disappointing 8.1 percent which means their economy grew at the slowest pace in just under three years. Also, I believe that the recent announcement from Saudi Arabia’s oil minister indicates they are determined to see lower oil prices and that should certainly have a short term negative impact on prices. If that’s not enough bearish news for oil prices, then how about yesterday’s rise in jobless claims and last weeks very disappointing non farm payroll numbers? Fundamentally this should provide the oil bears a little more comfort.
After adding up all this news and looking to the charts, I believe May WTI is prone to retest this weeks April 10th low and if broken, should test the 200-day moving average all the way down at $96.95 a barrel. Also, WTI should feel further weakness with the 20- day MA about to make a bearish cross over pattern under the 50-day. Lastly, back on March 29th you can clearly see on the daily May crude oil chart that it broke through support and technically ended it’s very strong bull rally. I have highlighted below all the technical levels on my RJO Vantage daily candlestick chart.
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Nick DeGeorge
Senior Commodities Broker
Nick DeGeorge began his financial career in the mortgage/ banking industry. After a successful seven year career, he had an opportunity of a life time to trade for one of the larger proprietary day trading firms at the Chicago Board of Trade. While there, he specialized in trading energy (mostly crude oil), metals, and E-mini S&P 500. After two years of being a proprietary trader, Nick became a Senior Commodities Broker at MF Global and worked for the top Commodity Trading Advisor at the firm. W.... Read More
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