Technical analyst Taki Tsaklanos explores a bevy of possibilities for oil prices over the next year, and concludes “black gold” may just stay rangebound.
Exactly two years ago, crude oil started its historic collapse of almost 75%, a decline that was never seen before in history.
Now that crude has stabilized, what is our crude oil price forecast for 2017?
Before looking into that question, it is always interesting to go back in time and look at former price forecasts from the experts. Let’s first revisit what the pros predicted in 2014:
We really got a mixed picture back then, so it was hard for investors to choose a direction based on these articles.
Now that is exactly the reason why we rely on charts. On any chart, supply and demand come together. Though fundamental analysis may be useful to get an understanding on dynamics within a market, charts are helpful in forecasting future price directions with a high degree of probability.
A Crude Oil Price Forecast For 2017
Examining crude oil’s chart is not easy, certainly not when trying to forecast its price. In general, the crude oil price is very volatile, and, hence, complex. In order to get an idea of future price direction, we have to identify chart patterns.
The patterns that are visible on crude’s chart are, in general, forming three areas:
Our expectation is that crude oil prices in 2017 will not move up to area 1 and will not collapse into area 3. By exclusion, we predict that crude will trade mostly within area 2 throughout 2017.
The $35 to $40 range will act as strong support. Prices could certainly move higher, but will find secular resistance at $75 where the 2014 gap down started.
So, overall, investors could go long in 2017 once crude oil prices fall towards the $40 level and close positions (or go short) above $60.
This article is brought to you courtesy of Investing Haven.