This is the market where you should buy downturns.
The West Texas interim oil market fell quite hard during the trading session on Friday, showing signs of exhaustion at the $ 65 level. The $ 65 level is an area where we have seen selling pressure before, so it makes sense to look for it again in the last 24 hours. That being said, the trend is still upward, and I could even make an argument for a small piece of the ascending triangle that is trying to form here. At the very least, we could talk about a potential growth channel in the last couple of months.
Below the potential channel, we also have a 50-day EMA offering support, so it is likely that we will continue to see buyers based on this technical indicator. We have been in an uptrend for some time, although we recently had a good pullback, which suggests there may be little value in the market. Therefore, I believe that if we see a supporting candlestick or some type of bullish impulse candlestick, we can enter a long position.
If we did break below the 50-day EMA, it is very likely that we could look at the 200-day EMA. This is the least likely scenario, however, since most traders are enacting “resuming trading” through the oil market. It also helps that OPEC + and British Petroleum have proposed that demand for crude oil continue to rise at 6 million barrels per day until the end of the year, despite India, Brazil and Japan all suffering from the oil resurgence. coronavirus. Most of the growth in demand they see is happening in countries such as the US, China, the European Union, and the UK.
This is the market you should buy in downturnsEven though Friday was relatively tough, we actually tested the main barrier of resistance and it was the end of the month when people were taking profits in what was very strong gains to account for clients. Now that this has been decided, people will start looking at the long term trend.