CRUDE breaks below key technical support level
Crude Oil (CRUDE) Technical Analysis Report for Dec 06, 2018 | by Techniquant Editorial Team
CRUDE finished Thursday at 51.71 losing $1.21 (-2.29%) ahead of tomorrow's NFP report. Closing below Wednesday's low at 52.16, Oil confirmed its breakout through the prior session low after trading up to $2.08 below it intraday.
Daily Candlestick Chart (CRUDE as at Dec 06, 2018):
Thursday's trading range has been $3.22 (6.08%), that's above the last trading month's daily average range of $2.53. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently strongly lower than usual for CRUDE.
Notwithstanding a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle.
Prices broke below the key technical support level at 52.56 (now R1), which is likely to act as resistance going forward. The last time this happened on November 20th, CRUDE actually gained 2.34% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could speed up should prices move below the close-by swing low at 49.41 where further sell stops might get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Engulfing Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Oil. Out of 111 times, CRUDE closed higher 57.66% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after nine trading days, showing a win rate of 50.45% with an average market move of 0.42%.
With five out of the other seven Commodity Markets closing lower today, the ones that stand out on the negative side are NATGAS losing -1.78% and SUGAR closing -0.63% lower. On the flipside the best performers have been COFFEE closing 0.57% higher and GOLD gaining 0.04%. Read more