Crude oil long-term projection

We have the worst drop in crude oil prices in history and followed by a sharp recovery. At the current time, crude oil prices almost reach $40.00 handle. Understandably, the current upward movement happen as the stimulus, measures taken by the government, and Central banks across the world are taking place.

Crude oil prices also gaining because of OPEC+ pledge to cut production to record low. However, the upward movement will come under challenge if coronavirus cases continue to rise in 3-6 months forward. At the current time, crude oil prices might pause near the $40.00 handle, waiting for further development.

New Month

Monthly chart

Crude oil bullish run has brought the price to reach the 50% Fibonacci Retracement level. This month, the price continues higher but capped near the 50% retracement. There is a possibility the price could continue upward and reach 61.8% (On the chart it is misrepresented by 38.2%). retracement level. At the current time, traders might want to wait for the reaction from the 50% retracement level.

If there is a major bearish pattern formed on the monthly chart then crude oil might resume its long-term bearish trend.

Weekly chart

On the weekly chart, the outlook is not different from the monthly chart. Crude oil prices are waiting for a further reaction from the 50% Fibonacci Retracement level. On the upside, the price soon might close the gap and decide the next direction.

Crude oil might extend its bullish movement and target the 61.8% retracement level.

Daily chart

Crude oil currently testing the $38.50 resistance level and looking to target the gap level. Above the $38.50 level, there is the daily SMA 200 which might reverse the current bullish pressure. Traders might want to be careful at the current positions and avoid taking long positions.

Short positions, when the price reaches the daily SMA 200 and forms bearish reactions, is the strategy traders could take.

Trade plan

Crude oil has recovered from its worst drop ever and almost reach the $40.00 level. As the current upward movement might be too fast, traders will avoid adding more long positions for now and waiting for a bearish correction to happen.

$30.00 is the level to watch when the price makes a bearish correction.