WorldWideMarkets Community

Forex Trading, Market News & Technical Analysis

Today’s Trading Edge: US Oil: Where crude might find some support.

Posted by Edward Moya on Mar 13, 2015 7:35:00 AM

WWM US OIL MAR 13 2015

US oil prices fell for a fourth consecutive day after the International Energy Agency (IEA) announced an increase in its production estimate for 2015.  Despite cutbacks in drilling rigs, output has decreased at all.  Concerns are growing for reduction in output as crude inventories are coming closer to capacity limits, and that could lead to lower oil prices. 

Price action on the 4-hour oil chart shows that recent slide extending back to the March 5th high is currently breaking below the 127.2% Fibonacci expansion level.  The next key support level is the $45.89 zone, which is where we could see a bullish Gartley pattern form.  The tentative point D could be confirmed by the 78.6% Fibonacci retracement of the X to A leg and the 141.4% Fibonacci expansion level of the B to C leg. 

If downward momentum prevails and invalidates this pattern, we could see a quick fall towards the January low region of $43.58.  Critical support will remain the psychological $40 handle. 

The trade: Buy oil at 45.89, with a stop loss at 44.89 and take profit at 47.89.  The risk/reward ratio is 1:2

Edward J. Moya

Senior Market Strategist

WorldWideMarkets Online Trading 

Topics: US Oil, West Texas Intermediate crude oil, West Texas Intermediate, $OIL, oil price

 

Tools & Educational Resources

Forex 101LEARN MORE >>
Learn the basics of Forex and how to practice trading the markets.

GlossaryLEARN MORE >>
Confused by the language? Click here and search for key trading terms.

FAQ CenterLEARN MORE >>
Browse our frequently asked questions and find your answers right away.

VideosLEARN MORE >>
Access to the educational lessons, webinars and platform walkthroughs.

READY TO TRY THE MARKETS?

Get started with a FREE $10,000 Demo Account and experience the Forex Market RISK FREE!