Brent crude oil finally jumps nearly 5% since last weeks low on the hope of potential production cut from the primary producers.
Technically there are too many bearish factors on oil out there, whereas the oversold RSI helped the price not to fall quickly towards the wave C. As we highlighted a couple of times, it had lost the 200WMA and settled below the key moving average.
As long as it trades below that the momentum remains to the downside.
Remaining below its 200WMA, we may see more downside risk towards $52.50 and $50.00 levels. The corrective wave pattern suggests it might fall to $51.70. It will be interesting to see if we make a move to $50.00 levels.
As shown on the below chart, it is still possible that the price would eventually be made a new low around wave C or else one steep cut if a complex correction continues to surface. In both scenarios, the common trend should be higher and possibly towards $60.00 and $63.00 levels.
Medium-term: Following the colossal rejection at 200MA (Monthly), we are now finally entering the major support zone. The January 2019 low and December 2018 low ($52.50 and $50.00) should now become support, and so if your bullish Brent, then this is the place to take a shot. I like long here $52.00 with a stop at $50.00 (daily closing) looking for a bounce back to $55.00 and $60.00 levels.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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