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Outlook for WTI crude, gold and silver

Jason Sen

WTI crude oil looks like it is completing an inverse head-and-shoulders for a buy signal. You can see this in the daily chart below.

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Breaking above key resistance at $54.20/30 would be a buy signal. This would initially target $55.55/55.65 but there is a good chance we can reach $57.20/30, $57.50 and $57.90/58.10. Eventually we could climb as far as $59.20/40.

In the very short term, for intraday traders today there is a small channel with upper trendline resistance at $55.30/40. So a break above here should accelerate gains. If we fail here today we must hold the neckline to the head-and-shoulders at $54.30/20 for the pattern to remain relevant (at least on a weekly closing basis).

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Gold started a rally in August and really built momentum from November, climbing from $1195 to $1298 in early January. After a three-week pause we broke higher again last week from a bull flag formation, to reach strong resistance at $1320/25. This is from an 18-month trendline and the green 500-week moving average, as you can see in the weekly chart below.

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A break higher, confirmed with a weekly close above the resistance tomorrow night, would therefore be a strong medium-term buy signal. This would target $1334/35, $1340/41, $1345/46 and $1349/50.

Note how the moving averages on the daily chart are close to seeing a bullish golden cross from the purple 55-day moving average crossing above the green 500-day moving average. Not too far behind is the blue 100-day moving average approaching the red 200-day moving average at $1215.

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If bulls decide to take profits, triggering a move to the downside, we are likely to test the previous highs at $1300/1298. Any further losses meet good support from the 23.6% Fibonacci at $1285/83.

The monthly silver chart below shows the price finally breaking above a 10-year trendline, after we topped exactly here at the start of the month.

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Holding above the 10-year trendline at $15.80/90 targets 500-day and 100- and 200-week moving average resistance at $16.25/30. In overbought conditions, bears could try short positions with stops above $16.37. See the chart below.

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A break higher is a huge longer-term buy signal, but I need to see a weekly close above for confirmation tomorrow.

Jason Sen

Technical Analyst & Trader

For more information and trading education visit Intertrader

The content of this article is the personal opinion of the author and not Intertrader. You should under no circumstances consider the information and comments provided as an offer or solicitation to invest. This is not investment advice. The information provided is believed to be accurate at the date the information is produced.

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