Buying the Pullback in US Oil at the 50 SMA
Crude Oil has retraced lower today after the jump last Friday as OPEC decided to cut production further, but the 50 SMA is holding as suppor
Crude Oil has been on a bullish trend since the beginning of October, when US WTI crude turned bullish at $51. Since then, US crude has been trading inside an ascending channel which took the price close to $60. We did see a dip in the last day of November, after Russian energy minister Novak suggested that OPEC+ postponed any further production cuts until later next year.
But OPEC decided to cut crude oil production nonetheless. It was a small cut, of 50k barrels/day, but it had an impact on oil prices anyway. US WTI oil jumped more than $2 higher on Friday after it became evident that OPEC+ was cutting production again.
But, the buyers couldn’t push above the big round level at $60, which is a psychological barrier. WTO oil has retreated and slipped more than $1 lower so far.
Although, it seems like the 50 SMA (yellow) is providing support on the H1 time-frame. The price formed a small doji candlestick above that moving average, which is a bullish reversing signal after the pullback. So, we decided to go long on this bullish reversing pattern on the H1 chart.
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