October WTI crude oil futures have traded tightly during the overnight. We should see some extension during today’s U.S. session. With inventories for the week already in, day traders will be looking to enter the market in force. There are a few key levels and premium trades to break down, so let’s get to it!

Technicals

As I mentioned yesterday, last week’s range has not been penetrated as we move into the Thursday/Friday sessions.

October WTI Crude Oil Futures-Daily Chart

So, are we going to see a directional move this week or not? In my opinion, we are likely to see considerable action during today or tomorrow’s session. Here are the dominant support and resistance levels:

• S1 at 38% of Wednesday’s range $48.13

• S2 at the Bollinger Band MP $48.07

• R1 at 62% current wave $48.93

• R2 78% current wave $49.53

• Psyche level at $50.00

As of now, the setup on the daily chart is challenging the support levels. October crude is trading around $48.00 on the open, right at the 38% level. Heavy participation is expected today so conditions are primed for a scalping approach.

The Trade: Here are several trades that I will be watching today, most of which are tight, short-term scalps:

1. Breakout buy over Wednesday’s high of $48.51. This area will be heated. Looking for a 5-10 quick scalp on the break. R/R of 1:1 or 1:1 ½

2. Resistance sell from $48.90 with a stop just above $49.00. The market may be in full breakout mode, so grab quick profits. R/R of 1:1

3. Position long from 78% of yesterday’s range $47.75. Stop under Wednesday’s low of $47.53 at $47.49. R/R of at least 1:1, preferably 1:2 or 1:3

As always, watch the money management and trade for tomorrow!