WTI oil Futures (US: CL1) had an unprecedented move when the price collapsed to -40.00, a drop of more than 300% in a single day. Open interest remains high at over 14,000 for June contracts as the May contract expires today and it was rolled over to the June contracts. As such, there is a spike in buying for the moment.
Based on the technicals, the trend remains bearish and there are key levels to watch out for are 10.88, which is at the deep retracement level of 88.6% of the daily range. This level is significant, it is the start of the strong sell-off that brought oil prices into the negative territory.
Should this level be broken, we will see the price rising to 33.30-39.88, which is the 127.2% extension level of the daily range. It is the bearish gap zone waiting to be filled and there will be a grand sell-off once this pricing zone is filled.
Otherwise, should 10.88 shows signs of rejection, there will be a continuation of the downtrend.
*The technical call is valid for 3 weeks only.
Simple moving average
Red line = 200 SMA Line
Blue line = 50 SMA Line
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