Date: 13 Mar 2019

On October 4 last year, the bears took over in Light Crude and dragged the market to a Christmas Eve low of US$42.36. From here the bulls were able to take over again and push the market to an interim high plateau between US$55.50 and US$57.50 where the market has been moving sideways since February 18.

The MACD indicator provides little clarification about what might happen next because, as is usual in sideways phases, it is running almost parallel to its trigger line with little momentum. Likewise, the histogram is not very meaningful.

Although the short-term 50-day and 38-day smoothing lines formed a bullish cross in mid-February, this has not yet had any bullish impact on the market. The contract is currently trading above both lines, which could serve as short-term support in the event of a setback.

A sustainable breakout from the sideways range is needed for further short-term development. On the lower band, this is limited by the US$55.50 range, which can serve as support for the market. If the market breaks through this, heading downwards, and does not stop at the smoothing lines, the market could slide further, and another important support level could be in the US$50.55 range.

However, if the bulls prevail, and the breakthrough at US$57.50 is sustained, the next structural level could be in the US$59.55 range. If the contract overcomes this area with momentum, the next significant resistance zone could be at US$63.70.

 

LCrudeApr19 Daily Chart | Source: ActivTrader

LCrudeApr19 Daily Chart | Source: ActivTrader 

 

Written by Daniel Schuetz, External Analyst

 

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