2016-11-01 12:11:27

Review and dynamics
Yesterday the price of crude oil Brent has broken down psychologically important level of $50.00 per barrel.

The oil market is getting pessimistic about successful outcome of all preliminary agreements to reduce oil production by OPEC.

Today, the price of crude oil Brent has been growing since the opening of the trading session. However, the rise in moderate and the decline may resume any time. At the beginning of October the price of Brent soared up to the level of 53.70 (ЕМА144 on the weekly chart) after the statement by President of Russia Vladimir Putin that Russia would share the efforts to limit oil production and that freezing or reduction of oil production is the only way to maintain stability in the oil and gas sector.

Our opinion
We said previously that OPEC actions may be insufficient to change existing excess of supply of oil given probability of the interest rate hike by the US Fed. It is likely that after consolidation at the current levels oil price will to decline sharply.

Traders shall be very caution when opening or keeping long positions. The price may not break through the range of 52.80 – 53.70. The price of Brent can return to the range of support level of 46.20 (Fibonacci 50.0% after the decline from $65.30 to the lows of 2016 at the level of 27.00) and 47.45 ( moving average line ЕМА200, ЕМА144 on the daily chart).

It seems that the decline to the levels of 47.45 and 46.20 may take place soon.

Breakdown of the level of 46.20 may trigger further decline in oil price with the nearest targets of 43.65 and 41.70 (Fibonacci 38.2% and the lows of July/August).

As an alternative scenario the price can go above the levels of 50.00 and 50.70 (Fibonacci 61.8%) and go further up.

On 4-hour, daily and weekly charts the indicators OsMA and Stochastic give signals for short positions.

Support levels: 48.00, 47.45, 47.00, 46.20, 45.00, 43.65, 41.70 and 41.00.
Resistance levels: 50.00, 50.70, 51.10, 53.00, 53.70, 55.00 and 56.00.

Trading tips
Sell on the market. Stop-Loss: 49.20. Take-Profit: 48.00, 47.45, 47.00, 46.20, 45.00, 43.65, 41.70, 41.00.
Buy Stop: 49.30. Stop-Loss: 48.80. Take-Profit: 50.00, 50.70, 51.10, 53.00, 53.70, 55.00 and 56.00.

Indicator give sell signals
Indicator give sell signals

Breakout of the level of 50.00
Breakout of the level of 50.00