Crude oil long-term projection

Not much to talk about crude oil for now as coronavirus outbreak has not been solved yet. OPEC decision to further cut oil production gave no impact to crude oil prices. The price of crude oil continue lower in January and expected to experience bearish pressure until spring.

Traders and investors mostly focused on coronavirus treatment for now. As long as there is no cure for the outbreak then crude oil prices expected to continue lower.

Click here to see Oil January analysis

New Month

Monthly chart

Crude oil tumbled in the previous month as China hit by coronavirus. The bearish movement has strong momentum and expected to continue this month. We have a bearish engulfing pattern and there is further bearish pressure this month. It is better for bull traders to stay away for now.

Weekly chart

The bearish trend confirmed after the close below weekly SMA 200 and there is no stop to the bearish pressure yet. Similar to the outlook on the monthly chart, it is better to wait until crude oil reach a support level and form a major bullish pattern before looking for long positions.

At the currrent time, $50.00 and $47.00 are the levels to watch.

Daily chart

On the daily chart, crude oil tested the 61.8% Fibonacci Retracement around $51.50 and rejected. The price looks will continue its bearish movement and test $47.80 – $48.70 area. No long positions suggested for now as the trend is bearish. Traders might want to stay sideline for now.

Trade plan

Crude oil movement dominated by fundamental situation from China which hit by coronavirus. The death toll continue to rise and oil demand disrupted. The logical action to take is stay short on crude oil for now. It is possible spring will alleviate the damage cause by coronavirus. Traders might want to monitor OPEC too, will the cartel decide to take massive action to cut oil production further?