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Andreas Zanin
Analysis | January 12, 2021

KTM Commodity Weekly: Wave C is the next possible target

  • Kick-start the year with solid gains
  • Raise four out of five trading days

Finally, the Brent crude oil price settled above the 100MA for the first time since December 2019. And also, monthly, the price closed above 20MA for the first time since April 2019. Now the price action running to an area of resistance defined by the following:

  • The Weekly 200EA located at $56.25 and 200MA located at $58.60
  • The monthly 50MA finds at $58.20
  • The 2-year trendline finds at $58.

Any minor corrections will attract buyers as the weekly A-B-C pattern suggest $63 is the next immediate target. The nearest resistance from the current level is at $56.25, beyond which the resistance comes between $58-$58.20. Until the price stays above the support zone of $50.50-$49, it can be approached with a bullish bias.

Two factors led the recent rally:

  1. The recent rally from $50-$56 was primarily inflated by Saudi Arabia’s surprise voluntary production cut of 1m barrels a day in February and March.
  2. Crude oil prices supported by Risk-sentiment with strong equity markets and rally witnessed in the US yields.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

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