ABCD Pattern Completed – Should We Sell WTI Crude Oil?

The EIA inventories failed to surprise the Oil traders as most of them are out on holiday for Thanksgiving or Black Friday. The technical side is quite interesting and sooner or later there will be a good trade.  

Fundamentals Overview

The Energy Information Administration reported a draw of -1.9M which was slightly higher than the forecasted -1.4M., but the Oil remained intact.  

One of the reasons Crude Oil faced resistance is the US Sales Orders of Capital Goods which unexpectedly fell in October. The drop in US sales came after three consistent months of hefty gains. The US, as a top consumer of Crude Oil, surely influences the investor's sentiment regarding future demands. As a result, the Oil prices remain unchanged despite the drop in inventory figures.

Technical View

Crude Oil has formed an ABCD pattern on the 4-hour chart. It just completed the C to D leg at $58. Technically, the bearish ABCD pattern leads to selling trends. Hence, we can expect a sell-off in the overbought Crude Oil.

Crude Oil – ABCD Pattern 

For now, we need to keep an eye on $58 as it's providing solid resistance. Whereas, it's likely to face an immediate support at $57.35 and $56.85. That's where I would like to place a buy.

WTI Crude Oil – Trading Plan

I'm looking to stay in sell below $58 with a stop above $58.25 and a take profit of $57.45 and $57. Good luck!

ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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