DISCLAIMER: I am not a financial advisor. All contents on this blog are solely my own personal views and for Commodities/CFDs Trading education/entertainment purposes only. Commodities/CFDs Trading are very risky. Losses can exceed deposits. Enter with discretion.
After double top candlesticks formed in the monthly charts last December 2019 and January 2020 respectively, the WTI went into a massive sell-off confirmed by the COVID-19 pandemic breakout. Oil price hit rock bottom last April 2020’s massive global lockdowns acted as the bearish catalyst. The price went to as low as $3 per barrel and even went negative just in April 2020 alone! I considered this dip as golden bags and lucky to those who bought them.
The following months started on May 2020 forward showed signs of recovery for the WTI’s price where we can see the biggest bullish candle for the said year. Then the trading price went range bound of supports found in the $33-35 range while resistances found in the $44-46 range.
Thanks to the late-November 2020 bullish rally, a beautiful MACD golden cross had occurred in the WTI’s monthly chart where it sent the Oil’s price to the upper monthly pivotal levels just in time before the year 2020 ended. Last month, December 2020 was a crucial month acting as a hard support where WTI trading volume went lower or should I say traders went cautious and made the price in consolidation mode.
I am seeing strong technicals for the WTI right now, where the monthly SMA 50 and weekly SMA 200 are both holding the Oil’s price acting as supports for the meantime.
As the year 2021 entered, WTI Oil’s price went stronger showing more signs of recovery and a possible more upside run. In fact, this January month alone has broken the 1-year WTI price curse since what we have seen in January 2020.
With more positive news revolving around the Oil in the news headlines during the past 24 hours like OPEC outlook sees a rise in demand for 2021 and as the US dollar still struggling to go higher, we are likely to see more price surges for WTI Oil in the upcoming weeks.
So my trading plan is I am long for WTI where any price right now is a good buy, but specifically I am assuming some small drawbacks so I will make a buy entry at $53. My stop loss will be going back to the Fibonacci retracement level of 1.414 found near the $48 range. I will take profit once price resistance is hit near the $70 range short-term.
Overall, this trading plan will give me a Risk:Reward ratio of approximately 3.40.
Thanks a lot for reading my analysis on WTI Crude Oil and I wish you a great trading day ahead!
