The Crude Oil market, on the H4 chart, was in an uptrend until the 12th of April when a higher top was recorded at 72.231. Sellers overwhelmed buyers and the market started moving downwards.
A closer look revealed that the Momentum Oscillator displayed negative divergence between point a and b compared to the price at 72.186 and 72.231. This could have alerted technical traders to a possible technical reversal that might happen in the Crude Oil market.
The price then broke through the 15 and 34 Simple Moving Averages with the Momentum Oscillator breaking the zero baseline, both confirming the possible technical reversal in progress.
A possible critical support level formed when a low was recorded at 71.045 on the 15th of April. Buyers pushed the market higher but a possible resistance level was hit at 71.763 on the same day and supply again overcame demand. A Shooting Star Candle confirmed that the sellers were still in control and this was further reinforced by the crossing of the 15 and 34 Simple Moving Averages, called a Death Cross.
If the price of Crude Oil breaks through the critical support level at 71.045, then three possible price targets may be projected from there. Attaching the Fibonacci tool to the bottom of the possible reversal at 71.045 and dragging it to the top of the possible resistance level at 71.763, the following targets may be calculated. The first target can be anticipated at 70.601 (161 %). The second price target can be predicted at 69.882 (261.8%) and the third and final target may be expected at 68.720 (423.6%).
If the possible resistance level at 71.763 is broken, the anticipated scenario is invalidated and will need to be re-evaluated.
As long as sellers maintain a negative sentiment and supply overcomes demand, the outlook for Crude Oil on the H4 time-frame will remain bearish.
A closer look revealed that the Momentum Oscillator displayed negative divergence between point a and b compared to the price at 72.186 and 72.231. This could have alerted technical traders to a possible technical reversal that might happen in the Crude Oil market.
The price then broke through the 15 and 34 Simple Moving Averages with the Momentum Oscillator breaking the zero baseline, both confirming the possible technical reversal in progress.
A possible critical support level formed when a low was recorded at 71.045 on the 15th of April. Buyers pushed the market higher but a possible resistance level was hit at 71.763 on the same day and supply again overcame demand. A Shooting Star Candle confirmed that the sellers were still in control and this was further reinforced by the crossing of the 15 and 34 Simple Moving Averages, called a Death Cross.
If the price of Crude Oil breaks through the critical support level at 71.045, then three possible price targets may be projected from there. Attaching the Fibonacci tool to the bottom of the possible reversal at 71.045 and dragging it to the top of the possible resistance level at 71.763, the following targets may be calculated. The first target can be anticipated at 70.601 (161 %). The second price target can be predicted at 69.882 (261.8%) and the third and final target may be expected at 68.720 (423.6%).
If the possible resistance level at 71.763 is broken, the anticipated scenario is invalidated and will need to be re-evaluated.
As long as sellers maintain a negative sentiment and supply overcomes demand, the outlook for Crude Oil on the H4 time-frame will remain bearish.
Comment:
The possible trade were triggered but the market immediately reversed and the possible protective stop loss was activated, protecting our trading capital as intended when the market does not do as we anticipated.