August 11 Chart of the Day - Oil
Light Sweet Crude Oil Futures (/CL) impacts anyone who drives a gas powered car as it directly impacts the cost of gasoline. And we all know that gas prices, along with inflation, have been on the rise.
Since making its spectacular plunge a few short years ago to below $7 per barrel the cost of this precious commodity experienced a meteoric rise to $130 before falling back and settling well below $100.
Currently trading in the low $80s we can use price action technical analysis to see that price may have an upcoming date with $90 or higher again.
To the downside (which most consumers desire) $62 seems to be a recent significant level that price was not able to break through. But if it does then price could revisit the $50 area.
The monthly chart provides us a birds eye view from which traders and investors can create their directional assessment. Moving down to a daily chart can provide actionable levels of interest in both directions.
But what seems to impact price the most are supply dynamics as imposed by OPEC and other entities. Those old enough to remember the oil embargo crisis of the 1970s recall that supply shortages caused skyrocketing gas prices and long lines at the pump. A situation that we hope never happens again.
So what's next?
Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.
- Support/Resistance
- Trend
- Fibonacci
- Supply/Demand Zones,
- Change Control Zones
Take a look at the charts and let us know what you think.
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