CME SEP 22 WTI CRUDE OIL FUTURES DAILY CANDLE SUPPORT ANALYSIS
This is a Sep 2022 (designated by the letter U in symbology) CME WTI Cl Futures chart. This is the first in a series, which is a Daily Chart describing SUPPORT levels. The second will be a more granular chart showing possible upside targets if the SUPPORT holds.
We had quite the failure on Friday, reaching ~$102.00 intraday, and falling ever since. The large "wick" on top of the candle designates the bulls lost control by the end of the day. So what now? Bulls are searching for support levels to hang on to any chance of a reversal back into any area north of ~$100.
SUPPORT levels are defined as areas where there are more people bidding (buyers), than there are people willing to hit those bids (sellers at market). Think of it as a floor made of ice (bidders) that needs 10 people (sellers) trying to jump on it, in order for it to break. If only 9 people are jumping, it will not break. Yet if there are 10, there will now be a hole that each subsequent person will fall through. **Each ice floor has a different thickness (number of bidders), and needs a different amount of people jumping (sellers willing to hit that bid at market) to break it.**
Since March 29, we have seen strong SUPPORT in the ~$90.00-~91.00 area. This is seen by the horizontal yellow lines. Even though CL broke through this area on July 14, making a low of $88.23, by the end of the day the bulls gained control, closing at $92.83. (It rallied ~$12.00 in the following 3 days) In order to show a strong conviction of breaking a SUPPORT level, traders look for it to CLOSE below a SUPPORT level.
Bulls on Thursday, August 4, 2022 are going to rely on the supply of bidders to outweigh the supply of people hitting these levels.
Up Trendlines are another way to show SUPPORT levels. They are drawn from lows. (The more times this up trendline is touched, the more likely it is said to be strong. Using the lows of March 15-17 (~$85.50-~$86.00) connected to the low of July 14 ($88.23 which is a higher low), we can see the extension of this line reaching the ~$88.50-$89.00 level through the end of this trading week. This is one of the last Support levels for the bulls.
After a SUPPORT level is broken, traders look to previous lows for the next area of support. This would be the lows of March 15-17 (~$85.50-~$86.00), and finally the lows made on Feb 15-17 (~$81.00).
TO SUMMARIZE:
Traders looking to get long have the following SUPPORT levels to be aware of. If Level 1 is broken, the odds are in favor for Level 2 be reached. Level 2 broken, Level 3 is likely to be reached, ect. The risk to reward trade favors the longs against these levels, IF YOU KEEP A TIGHT STOP.
**REMEMBER** A CLOSE below these levels holds more significance than an intraday break.
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SUPPORT LEVEL 1: ~$90.00-$91.00
SUPPORT LEVEL 2: ~$88.50-$89.00
SUPPORT LEVEL 3: ~85.50-$86.00
SUPPORT LEVEL 4: ~$81.00
-Paul Wankmueller, CMT
Director of Content @ Blue Line Futures
We had quite the failure on Friday, reaching ~$102.00 intraday, and falling ever since. The large "wick" on top of the candle designates the bulls lost control by the end of the day. So what now? Bulls are searching for support levels to hang on to any chance of a reversal back into any area north of ~$100.
SUPPORT levels are defined as areas where there are more people bidding (buyers), than there are people willing to hit those bids (sellers at market). Think of it as a floor made of ice (bidders) that needs 10 people (sellers) trying to jump on it, in order for it to break. If only 9 people are jumping, it will not break. Yet if there are 10, there will now be a hole that each subsequent person will fall through. **Each ice floor has a different thickness (number of bidders), and needs a different amount of people jumping (sellers willing to hit that bid at market) to break it.**
Since March 29, we have seen strong SUPPORT in the ~$90.00-~91.00 area. This is seen by the horizontal yellow lines. Even though CL broke through this area on July 14, making a low of $88.23, by the end of the day the bulls gained control, closing at $92.83. (It rallied ~$12.00 in the following 3 days) In order to show a strong conviction of breaking a SUPPORT level, traders look for it to CLOSE below a SUPPORT level.
Bulls on Thursday, August 4, 2022 are going to rely on the supply of bidders to outweigh the supply of people hitting these levels.
Up Trendlines are another way to show SUPPORT levels. They are drawn from lows. (The more times this up trendline is touched, the more likely it is said to be strong. Using the lows of March 15-17 (~$85.50-~$86.00) connected to the low of July 14 ($88.23 which is a higher low), we can see the extension of this line reaching the ~$88.50-$89.00 level through the end of this trading week. This is one of the last Support levels for the bulls.
After a SUPPORT level is broken, traders look to previous lows for the next area of support. This would be the lows of March 15-17 (~$85.50-~$86.00), and finally the lows made on Feb 15-17 (~$81.00).
TO SUMMARIZE:
Traders looking to get long have the following SUPPORT levels to be aware of. If Level 1 is broken, the odds are in favor for Level 2 be reached. Level 2 broken, Level 3 is likely to be reached, ect. The risk to reward trade favors the longs against these levels, IF YOU KEEP A TIGHT STOP.
**REMEMBER** A CLOSE below these levels holds more significance than an intraday break.
FEEL FREE TO DM ME ABOUT ANYTHING TECHNICAL ANALYSIS RELATED! EDUCATION IS OUR SPECIALTY!
PLEASE COMMENT, LIKE, FOLLOW! WE LOVE OUR AUDIENCE!
SUPPORT LEVEL 1: ~$90.00-$91.00
SUPPORT LEVEL 2: ~$88.50-$89.00
SUPPORT LEVEL 3: ~85.50-$86.00
SUPPORT LEVEL 4: ~$81.00
-Paul Wankmueller, CMT
Director of Content @ Blue Line Futures
Trade active:
Support Levels held nicely this week!