March West Texas Intermediate Crude Oil futures are trading higher shortly before the regular session opening. The move is a follow-through rally in reaction to yesterday’s news of an unexpected draw in U.S. gasoline inventories. On Wednesday, the U.S. Energy Information Administration (EIA) said that gasoline stocks fell by 869,000 barrels last week to 256.2 million barrels, versus trader expectations for a 1.1 million-barrel gain.
The main trend is down according to the daily swing chart. The trend turned down earlier in the week when crude oil took out three bottoms at $52.24, $51.72 and $51.59. However, momentum shifted to the upside on Wednesday with the formation of a potentially bullish closing price reversal bottom.
Earlier today, the closing price reversal bottom was confirmed on a move through $52.67. This could lead to a 2 to 3 day rally. The first target at $52.78 to $53.15 was reached earlier today.
Yesterday’s turnaround did not come as a surprise because it started when the March contract traded inside a major 50% to 61.8% retracement zone at $51.53 to $50.29. This is why you need to know price as well as chart pattern. Those who trade or analyze only patterns got caught in a bear trap.
more at source: https://www.fxempire.com/forecasts/article/crude-oil-update-market-rallies-sellers-get-caught-bear-trap-388354