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As experts in the field of trading and investing, we are here to provide you with valuable insights and information to help you navigate the complex world of the stock market. Today, we want to discuss the current state of crude oil prices and potential future movements.
Lower Price Levels May Yet Be Tested
Crude oil prices have seen a significant drop in the past couple of weeks, falling by 16.6% below the most recent swing high on August 26. This sharp decline was triggered by a breakdown from a large symmetrical triangle pattern that had been forming over the past year. The aggressive selling we are currently witnessing is not surprising given the size of the pattern.
Strong Possible Support around 63.67
Looking ahead, the next possible support zone for crude oil is around the 63.67 swing low, which coincides with the 141.4% extended target for a measured move at 63.3. This price level is also supported by the top of the long-term downtrend line, which adds further significance to its potential as a strong support level. When multiple indicators point to a similar conclusion, it is important to pay close attention.
Oversold Territory
Currently, crude oil has entered oversold territory on the relative strength index (RSI) momentum oscillator. While this may signal a potential bottom, traders should remain cautious and watch for signs of a possible counter-trend rally in the coming days. Looking at historical data, crude oil hitting the oversold level has often preceded a rebound in prices.
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