WTI crude oil futures are trading in heavy intraday rotation inside of Friday’s extended sell-off.  Thus far, November WTI crude is up moderately, posting a range of 59 ticks. With this week’s inventory cycle beginning Tuesday afternoon with the API release, traders are apparently in no hurry to engage crude oil.

Let’s dig into the technicals and see where crude is at and where it may be going.

Technicals

The last six months have produced optimal short-term trading conditions. Heavy volumes seem to be the new rule for WTI crude oil futures, with substantial global participation on a regular basis.

The daily timeframe for November WTI crude gives us some definitive support and resistance levels.

November WTI Crude Oil Futures, Daily Chart

A few key elements to be aware of:

• There is formidable resistance from $50.30 to $50.00.

• We are observing rotation around the 62% retracement level of $49.48

• The 78% retracement level at $48.59 serves as robust downside support.

Bottom Line: Friday’s low of $49.10 will bring participation to the market, either driving price to the 78% level or rejecting $49.00 entirely.

For today, I will be selling the support zone from $49.99 and buying the 78% level at $48.59.

A reasonable 1:1 R/R position short is the idea from the resistance zone. In the event that a trend day down develops, longs from $48.59 implementing a tight scalping methodology is the best way to take a few ticks from this market.