2016-09-23 14:58:07

Review and dynamics
Oil prices go down today. Last Friday’s report of the American oilfield services company Baker Hughes on the number of active oil rigs showed the increase of rigs last week (two more units, up to 416 units). If today their number will grow again, the price of oil may continue to go down. Spot price of crude oil Brent at the beginning the European session today is near the level of 47.20.

Our opinion
In the short-term, Brent is traded in the narrow range between support level of 46.85 (ЕМА200 on the hourly chart) and the resistance level of 47.20 (ЕМА200 on 4-hour chart). Breakout to either directions will determine today's trend.

On the hourly and 4-hour charts the indicators OsMA and Stochastic give signals for short positions, on the daily chart the indicators suggest to open long positions.

The price is above important support level of 46.20 (Fibonacci 50.0% to the decline from $65.30 to the lows of 2016 at the level of 27.05 and the moving averages ЕМА200, ЕМА144 on the daily chart), and near the lower line of the ascending channel on the weekly chart.

Due to profit taking cat the end of the week, the price can go further down to the support level of 46.20. There is also high probability that the downward momentum will gain momentum if no agreements will be reached at the upcoming meeting on Wednesday.

The price may return to the downtrend, which started in June. The last level, preventing the fall in oil prices, will be support levels of 43.65 and 41.70 (Fibonacci 38.2% and the lows of July/August).

As an alternative scenario the price can go up to the levels of the annual highs at 50.70, 52.80. It can be possible in the case of the agreement to freeze oil production will be reached at the OPEC meeting. However, there are no high hopes for such an outcome of the meeting.

Support levels: 46.85, 46.20, 45.00, 43.65, 41.70 and 41.00.
Resistance levels: 47.20, 47.60, 50.00, 50.70 and 51.00.

Trading tips
Sell on the market. Stop-Loss: 47.30. Take-Profit: 46.85, 46.20, 45.00, 43.65 and 41.70.
Buy Stop: 47.30. Stop-Loss: 46.90. Take-Profit: 47.60, 48.50, 50.00, 50.70 and 51.00.

Indicators give signals to buy
Indicators give signals to buy

Indicators give sell signals
Indicators give sell signals