Oil futures remain bearish on the daily oil chart

wti december oil futures on the daily chart
December WTI Oil Futures – Daily Chart

The WTI December oil futures contract closed Friday’s oil trading session at $86.28 having traded in a narrow range for much of the day as for the third consecutive day in a row, the psychological $85 per barrel level was tested once again. The sentiment for oil however remains heavily bearish for two key reasons. First, the price action on Tuesday broke through the floor of recent price congestion, now adding a further layer of resistance above should the market attempt to reverse higher. Second, and perhaps more significantly, is the extreme selling volume associated with last week’s price action, and confirming on the daily chart, the negative sentiment for oil at present.

Indeed this is further confirmed on the three day chart, where selling volume has also appeared, and adding further downside pressure, with both the daily and three day trends now in agreement. In addition, last week our trading indicators delivered two consecutive signals to enter new positions, the first a volume based signal and the second a trend based signal the following day. All of this bearish sentiment was first signaled by our initial trading indicator which gave us an early warning, back on the 18th September which was coupled with an aggressive entry signal and subsequently confirmed with a conservative entry five days later.

For next week, the key level is at $85 per barrel. If this is breached as expected early in the week, then expect to see crude oil prices sell off again, and continue to move lower to test the $80 to $82 level in due course.

By Anna Coulling

About Anna 1064 Articles
Hi – my name is Anna Coulling and I am a full time currency, commodities and equities trader. I have been involved in both trading and investing for over fifteen years and have traded many different financial instruments, from options and futures to stocks and commodities. I write and publish articles ( mostly for free ) for UK and international publications on a wide variety of financial issues, and in particular I enjoy helping others learn how to invest and trade.

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