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WTI Crude Oil Approaching Confluence of Resistance at 63.80

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Crude oil is on a tear so far this week.

It started with the March 28th bullish pin bar from the 58.20 support area.

Fast forward to this week, and crude is trading up around 62.60. It’s been an impressive four-day rally to be sure.

However, buyers haven’t had much of a test since climbing above 58.20.

Sure, the 60.30 area capped the late March advance. But 60.30 pales in comparison to what lies above at 63.70/80.

Let’s run through a few reasons why I like 63.70/80…

1) It’s the level that provided support for crude oil in June and August of last year.

As we know, old support becomes new resistance. So the fact that this area served as support last year means it will likely act as new resistance this year.

2) The 63.70/80 area lines up nicely with what could be ascending channel resistance.

It isn’t the most established channel, but resistance could become a factor nonetheless.

3) The 61.8% Fibonacci of the aggressive selloff that commenced last October comes in at 63.60.

That selloff took oil from 76.70 to 42.40 in less than three months. It’s significance, and resulting Fibonacci levels shouldn’t be discounted.

Those are three valid reasons why this market may begin to struggle as it approaches the area between 63.70 and 63.80.

So what should we do with that information?

Well, if you’re long crude oil, you may want to think about booking at least some profit at 63.70/80 should buyers begin to falter.

And if you’re considering shorting oil in this area, I would require bearish price action such as a pin bar or engulfing pattern before doing so.

Without a signal that buyers are tiring, selling into a strong uptrend like this is a risky endeavor even at a critical area like 63.70/80.

Remember that watching from the sideline is always a viable option.

In fact, it’s preferred unless you have a setup that fits your criteria. Until then it’s a wait-and-see market.

IMPORTANT: I use New York close charts so that each day closes at 5 pm EST.

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Confluence of resistance on crude oil daily chart

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12 comments
Justin Bennett says

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    Engr. Moses Madukaego. C says

    Thanks Justin.
    Can you please include Eliot wave trading technique into your lessons?

    Reply
      Justin Bennett says

      You’re welcome. I don’t use Elliot Wave.

      Reply
        Pierre Mifsud says

        Very good interpretation as always….Considering the current rapid weakness of the CAD, oil did not plummet much…..so still may have a potential to reach the 70.27 handle as from the weekly.

        Reply
Adebayo saheed says

Your tactical approach to chart is awesome and simple…. Thanks

Reply
    Justin Bennett says

    You’re welcome.

    Reply
    Lawal Rafiu says

    Good analysis. Please Mr Adebayo saheed how can I chat with you.

    Reply
Matt says

Thank you once again for the analysis, it has helped me a lot to read up on your posts. ive learnt a lot cz even before your post, my charts matched yours minus the channel haha…

Reply
    Justin Bennett says

    You’re welcome. Glad to hear that!

    Reply
lance says

Did you mean 66.30 (not 60.30)?

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    Justin Bennett says

    No, I meant 60.30.

    Reply
Oleg says

probably, it is also worth noting that there is an ascending wedge on the chart

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