General analysis WTI for 26.11.2021
Current Dynamics
Brent dropped sharply on Friday after the news of a new strain of COVID-19. The virus is spreading in South Africa and several other countries. Some states have already stopped flights to South Africa. The World Health Organization is currently investigating the virus to assess human health risks. Previous experience indicates a 100% chance of a global spread of the new strain, which is sure to hit all sectors of the economy if the available vaccines are useless.
Meanwhile, the U.S., China, Japan, South Korea and the U.K. have announced that they are ready to begin selling strategic stocks. The combined amount will be at least $71 million barrels, equivalent to 75% of global intraday consumption. OPEC+ estimates that the release of reserves will result in a daily market surplus of 1.1 million barrels per day. On December 2 participants of OPEC+ agreement will hold a meeting to start working on options to stabilize the hydrocarbons market.
COVID-19 will be the main driver for the market in the coming days. On Monday, the trading instrument may open with a strong price gap, as the news background of the weekend will be focused on information about the new strain.
Support and resistance levels
On the 4-hour chart, the instrument broke through the lower boundary of the Bollinger Bands. The indicator is turning downward and the price range has widened greatly, indicating a continuation of the downtrend. The MACD histogram is in the negative zone, maintaining a strong sell signal. Stochastic has entered the oversold area.
- Support levels: 72.45, 73.50, 74.90, 76.20, 77.27.
- Resistance levels: 78.70, 80.25, 81.75, 83.26.
Trading scenarios
- Short positions can be opened at the current price with a target of 73.20 and a stop loss at 78.20. Implementation period: 1-2 days.
- Long positions should be opened above the level of 78.30 with a target of 80.30 and a stop-loss at the level of 76.55. Implementation period: 1-3 days.