WTI Crude

October WTI Crude Oil Futures: Technical Outlook

Posted Monday, September 10, 2018 by
Shain Vernier • 1 min read

It seems like just yesterday we were contemplating the idea of $75.00 crude oil going into the fall trading season. Well, things change. Inventories are building, demand is hitting a plateau, and traders are happy on the short side of the global oil market. At press time, October WTI crude is trading to the bear, just above the $67.50 handle.

Today’s action on the futures market has been a bit strange. We are beginning to see the impact of split volumes, specifically between the October and November contracts. It is a bit premature to be talking volume, but the October/November spit is about 4/1. Be on the lookout for this to change rapidly as the trading week progresses. 

The October WTI futures contract has been traded exceptionally heavily due to seasonality. A coming directional move in the WTI market is likely as the big money players bring the October/November spread in. In my view, it will be toward the bear.

October WTI Crude Oil Technicals

WTI crude has come off nicely from last Tuesday’s spike above $71.00. For the moment, it appears as though $65.00 is the next psyche level up for scrutiny.

October WTI Crude Oil Futures (CL), Daily Chart
October WTI Crude Oil Futures (CL), Daily Chart

Here are a few support levels to watch as we approach this week’s inventory cycle:

  • Support(1): Daily SMA, $66.81
  • Support(2): 62% Retracement, $66.76

Bottom Line: For the remainder of the week, I will have longs queued up from $66.77. Using a flat 1:1 risk vs reward management plan, this trade yields 30 pips with an initial stop at $66.47.

A bounce from the 62% retracement support level is likely. With a bit of luck, this long play will set up during today’s late U.S. session.

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About the author

Shain Vernier is our US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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