{x} | Trading.live

Fundamentals

During the Asian session on Wednesday (Nov. 8), WTI crude oil rebounded slightly and is currently trading near $77.0 per barrel. Oil prices fell sharply yesterday, after breaking below the 80 psychological barrier, and continued to move sharply lower to 77 in the US session, which is also officially back in the range of the target price for the US Department of Energy's replenishment of the Strategic Reserve. The oil price majors chose to break to the downside with a violent break of the oscillator's two-week low, which also triggered stop-loss at that location, accelerating the market's decline. Yesterday, our judgment made a small loss. After the first attempt to open a position was stopped out, the second attempt to go long was followed by a slight rally in price. But the price couldn't get out of the profit zone and left the market after making the stop-loss to breakeven (a profitable order can't be turned into a loss). Overall, this small stop loss can be gladly accepted. Crude oil is in the key support range, but there is no effective rebound this week, which also saps the patience and confidence of investors who are bullish on oil prices. And the early morning release of the EIA report sharply downgraded the U.S. market demand expectations for crude oil in 2023, which weighed heavily on the confidence of the bulls in the market. Then the API data showed that the U.S. crude oil inventories accumulated sharply was the straw that broke the camel's back, and the mood lowered to freezing point. The price is also a force to be reckoned with, falling below the 79-78-77 triple hurdle in one fell swoop! After yesterday's plunge, the bearish sentiment has gotten a lot of venting. When the market calms down, it will re-examine whether the current left side is overly aggressive, and whether it is reasonable for oil prices to return to the level of July at this time in the context of continued production cuts as well as war. Here I would give the opinion that is not reasonable, as now the oil price is wrapped by the money and market sentiment. “Only when the tide goes out do you learn who has been swimming naked.” All I can say here is that the investors who went short at 74-76 were very rich "naked swimmers”.

Outlook Report: EIA Short-Term Energy Outlook Report: to lower 2023 global crude oil demand growth forecast by 300,000 b/d to 1.46 million b/d. (Previously 1.76 million bpd.) Revised 2024 global crude oil demand growth forecast upward by 80,000 bpd to 1.40 million bpd. (Previously 1.32 mb/d). Projected U.S. crude oil demand growth of -280,000 b/d in 2023, previously 60,000 b/d. U.S. crude oil demand growth is expected to be 200,000 b/d in 2024, compared with 150,000 b/d previously.

Inventory data: U.S. API crude oil inventories in the week of November 3 were 11.9 million barrels, with the previous value of 1.347 million barrels.

News: OPEC Secretary General: OPEC+ has taken active precautions to stabilize the market during 2023. All factors will be considered at the next meeting. And OPEC+ will take appropriate measures at the next meeting.

Today's focus: EIAI crude oil inventory data.

Technical Analysis

Oil prices moved sharply lower yesterday and ended up closing with a long saturated bear candle. Prices also fell below the end of August lows, back to the price level in mid-July, and this position is also an important support range; if it continues to fall below, the price could fall to 74-75 range. But given that after the price plunged, the bearish momentum has also been digested to some extent, and the daily MACD indicators have been approaching the oversold range. In the short term, the momentum of active shorting may have been insufficient. The bearish momentum of the 1-hour MACD is even more released to the limit, as well as a golden cross, which will lead to a rebound at the hourly level at any time. We have to pay attention to the price reversal signals, and once it appears that the hourly line is above the 20-day SMA, you can decisively try to go long.

Trading Plan: It is recommended to buy low mainly. If the oil prices sharply retracement to 76.8, you can try to go long with small positions, with a stop loss at 76.5 and the first target of the take-profit at 80.0, where you can reduce the position size and move the stop-loss to breakeven; the second target can be set at 82.5. If the price is at 76, you can continue to try to go long with small positions, with a $0.5 stop loss and the same take profit.

Trading Recommendations

Trading direction: Long

Entry price: 76.800

Target price: 82.500

Stop loss: 76.500

Support: 77.000/74.500

Resistance: 80.000/82.500