Where Will Crude Go After Inventory Report

Where Will Crude Go After Inventory Report

Where will Crude go after the Crude Oil Inventories on Wednesday? There are two potential scenarios that could play out using the higher timeframes to define where Crude will go.

Where Will Crude Go After Inventory Report
Where Will Crude Go After Inventory Report Getty Images

Where Will Crude Go After Inventory Report

The daily Crude Light charts shows the last low was back in August 2016 at about $45.00 (red horizontal line).  On May 5, 2017, this low was tested and rejected with the Stochastics showing divergence on the low (light red lines connecting lows in price and Stochastics).  Price then moved upward to about $52.00, before beginning a new descent.  What is most interesting on the daily Crude chart is that although price is still much higher than the previous low, the Stochastics is going lower (green circle).  This could indicates that price will revert back to the upside.

 

 

 

Where Will Crude Go After Inventory Report

The 60 minute is also showing the same pattern — higher low with Stochastics going lower.  The last low on the 60-minute Crude chart is around $46.74.  When price is making higher lows and the Stochastics is making lower lows the pattern is referred to as hidden divergence.  An expectation for price to reverse back to the upside is typical off this pattern.  However, a reversal bar has not formed indicating that the hidden divergence pattern is definitive.  Once the reversal bar is formed, price may break through the prior high at $48.40. If price manages to break through this area prior to the report, then we could see Crude reach up to the $49.250 area.

Where Will Crude Go After Inventory Report

The other scenario is that price fails to break through the prior high and a new low will form, bringing price even closer to the August 2016 low at around $45.00.  If this scenario plays out, then Crude will likely go down after the Crude Oil Inventory Report is released.

The information contained above may have been prepared by independent third parties contracted by Nadex. In addition to the disclaimer below, the material on this page is for informational and educational purposes only and should not be considered an offer or solicitation to buy or sell any financial instrument on Nadex or elsewhere. Please note, exchange fees may not be included in all examples provided. View the current Nadex fee schedule. Nadex accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representations or warranties are given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk and any trading decisions that you make are solely your responsibility Trading on Nadex involves financial risk and may not be appropriate for all investors. Past performance is not necessarily indicative of future results. Nadex instruments include forex, stock indexes, commodity futures, and economic events.

Nadex binary options and spreads can be volatile and investors risk losing their investment on any given transaction. However, the limited-risk nature of Nadex contracts ensures investors cannot lose more than the cost to enter the transaction. Nadex is subject to U.S. regulatory oversight by the CFTC.