Brent crude oil formed a bearish candle on the daily charts for the 2nd consecutive day in a row. The below chart pattern suggests that the price is vulnerable to a selloff.
In the near-term critical support for the index is placed around $59.50 October low coincides with 200MA (Weekly), and below that $58.40, its 50MA will act as support.
Upsides shall remain capped around $63.50 unless Brent crude manages a strong breakout above the said level.
Three levels to watch this week: $59.50, $59.00 and $58.40
The current correction will get accentuated further if bears manage to push the price below the said average at $59.50 on the closing basis, and in such a scenario initial target can be around $59.00. But, breach of this level can easily drag the index further lower towards $58.40 levels.
On the fundamental side, expectations are building for action to be taken by OPEC+ at its semi-annual meeting on 5 and 6 December.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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