A Bullish Stance is maintained as Crude Oil consolidates while retail positioning undergoes alterations
What’s Happening with Crude Oil Prices?
Retail Traders and Crude Oil
Lately, the price of crude oil has been staying pretty much the same. It’s taking a break from going up, which it has been doing since June. But even though the price isn’t changing much, retail traders are still making bets on what they think will happen.
What is IG Client Sentiment?
One way to see what retail traders are doing is by looking at something called IG Client Sentiment (IGCS). This is like a signal that tells us what most traders are doing. And right now, it’s showing that more traders are betting that the price of crude oil will go down.
What Does This Mean for WTI?
Only 36% of retail traders are betting that the price of crude oil will go up. Since most traders are betting on the price going down, this could actually be a sign that the price will go up in the future.
Recent Changes in Bets
In the past day and week, more traders have started betting on the price going down. The number of bets on the downside has increased by 12% compared to yesterday and 6% compared to last week. So, even though the price isn’t changing much right now, these changes in bets suggest that it could go up later on.
Looking at the Charts
If we look at the daily chart for crude oil, we can see that the price hasn’t been able to go below the 20-day Moving Average. This Moving Average has been acting as a support level, meaning it’s helping to keep the price from going lower. The price also hasn’t gone below the 61.8% Fibonacci extension level at 88.75, which is another sign that the overall trend is still going up.
What to Watch For
If the price does break below the 20-day Moving Average, we should pay attention to the 84.84 inflection point and the 50-day MA. These could act as support levels and help keep the price from going lower. On the other hand, if the price goes higher from here, we should keep an eye on the November highs at 92.43 – 93.72. These levels could be important and could make the Bearish Engulfing pattern from last week less significant.