Crude Oil Setting Up For A Downside Price Rotation

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Published : September 13th, 2019
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Category : Market Analysis

Crude Oil has been trading in a fairly narrow range since mid-August – between $52 and $57 ppb.  Our Adaptive Dynamic Learning (ADL) predictive modeling system suggested the downside price move in late July/early August was expected and the current support aligns very well with our ADL predictions of higher price rotation throughout most of September/October.  Please take a minute to review the original research post below :

July 10, 2019: PREDICTIVE MODELING SUGGEST OIL HEADED MUCH LOWER

Crude Oil Monthly Chart Forecast

We believe the current price highs, near $59 to $60, will likely continue as strong price resistance over the next 25+ trading days before a bigger breakdown begins near Mid-October.  We expect the price to continue rotating within a fairly narrow range in alignment with our ADL predictions.  Our original article suggested a high price target area near $60 from our ADL research.  Now that Crude Oil has nearly reached this level, we believe the continued upside opportunity in Crude Oil is limited. Be sure to opt-in to our Free Trade Ideas Newsletter to get more updates.

Daily Crude Oil Chart

This Daily Crude Oil Chart highlights what we believe will become resistance just below the $60 price level and suggests the $55 to $56 price level may be intermediate support.  Thus, we expect the price to rotate a bit lower, possibly into the $54 to $56 level, then stall and rotate further as we transition into the end of September.

Weekly Crude Oil Chart Trend Direction

We don’t expect anything crazy to happen in Oil until later in September or into early October.  Our ADL predictive modeling suggests that Crude Oil will peak in October and begin a broader downside move towards levels just below $50.  Crude Oil may begin this move a bit earlier than our ADL system predicts because of news or some fundamental data related to oil demand/supply.  It is not uncommon for the price to move towards the ADL predicted levels many weeks before or after our Monthly ADL predictions.  When we create the Monthly ADL charts, the data represented is based on highly probable levels for the completed month.  So, we know that near the month of October or November, Oil should be targeting the sub-$50 level. 

Concluding Thoughts:

Ultimately, near the end of 2019 or into early 2020, Oil should be targeting the sub-$30 price level on a larger downside price move.  Sub-$30 Oil would likely mean that global supply/demand issues, as well as global economic concerns, would be top-tier issues.  We believe the future price moves in Crude Oil will present very clear opportunities for skilled technical traders.  Right now, we have to be patient as the price continues to rotate above $55 and below $60 before the real price moves begin to take place.

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Chris Vermeulen has been involved in the markets since 1997 and is the founder of Technical Traders Ltd. He is an internationally recognized technical analyst, trader, and author of the book: 7 Steps to Win With Logic Through years of research, trading and helping individual traders around the world. He learned that many traders have great trading ideas, but they lack one thing, they struggle to execute trades in a systematic way for consistent results. Chris helps educate traders with a three-hour video course that can change your trading results for the better. His mission is to help his clients boost their trading performance while reducing market exposure and portfolio volatility. He has also been on the cover of AmalgaTrader Magazine, and featured in Futures Magazine, Gold-Eagle, Safe Haven,The Street, Kitco, Financial Sense, Dick Davis Investment Digest and dozens of other financial websites.
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