The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage. NEW YORK (TheLBF-Forex) -- Crude oil markets are oversold in the near-term, and West Texas Intermediate (WTI) (93.00) has a short momentum read in the mid-term. The four-hour trends are moving short, setting up a sell-the-test-of-resistance play from the next upside test of 95.50 on WTI trade.
The potential for new trade signals to form today is weak, after the recent explosive long and short moves that hit for 30-minute periods in the previous few sessions finally found the strength to hold lower. The reversal through resistance at 100.00 on WTI was highlighted last week, and has followed through to hit 93.00 support. Now is not the time to be holding WTI positions for the long term.
Headlines
News wires are very quiet regarding crude oil valuations, ahead of a quiet week of global economic releases. Today is not the day to be looking for crude oil trades.
WTI Four-Hour Chart: Trading under the low of May and the massive swing point formed at that time. The 100-day SMA (orange line) is at 100.0 resistance. The 200-day SMA (red line) is holding support at 92.00. Linear trend-line resistance is at 101.50.
ABC potential: A leg reversed from a test of 103.00 resistance to test 96.20 support. B leg moved higher to test 100.00 resistance. C leg has completed the test of 91.50 support.
Call to action: Look to sell the upside tests of resistance between 94.50 and 95.50. No long trade until a weekly chart can close above 97.50.
WTI Support and Resistance: Strong buying activity was seen at 97.00 on WTI in April and May. This price reversal and swing point area will now become massive upside resistance. Market alerts will be sent to subscribers as sustainable momentum builds. Main WTI support: 91.50. Main WTI resistance: 97.50.
USO Technical Outlook: The outlook for the United States Oil Fund (USO_) (36.70), the exchange traded fund (ETF) that tracks oil momentum, is for consolidation below 37.50 and a struggle to break (39.00) resistance. The ETF is likely to continue to lag behind the main moves seen in WTI futures contract trade, as major oil price action is taking place while the US session is closed.
