September Crude Oil
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Although September Crude Oil futures are set to finish the month sharply lower, the market is in a position to post a weekly closing price reversal bottom, which could fuel the start of a 2 to 3 week counter-trend rally and possibly more.
On Tuesday, July 28, crude oil reached a low at $46.68, but closed higher for the day. The subsequent reversal on the daily chart has put the market in a position to also form a potentially bullish closing price reversal bottom on the weekly chart. This will occur following a close over $48.14 on Friday.
A reversal bottom will not mean the trend is getting ready to change to up, but it could trigger the start of a 2 to 3 week rally. Beside the higher close, the market is also in a position to overcome a steep downtrending angle that has guided prices lower for seven weeks. This angle moving down $2.00 per week from the $62.51 main top, drops in at $46.51 this week. A sustained move above this angle will mean that momentum has shifted to the upside.
Crude oil is also in a position to overcome the previous bottom at $46.69. This level is important because overtaking this level could force short-sellers who sold a break down under this level to cover their positions. This will also signal a shift in momentum to the upside.
Based on the $62.51 to $46.68 range, the first upside target is a downtrending angle at $54.51. The primary upside target is its retracement…