Is CL looking bearish? Short below LIS/Yearly Open?NYMEX:CL1!
Macro update:
Will we see another bullish leg like Jan 2025? Or does crude oil have room to move further lower and resume its downtrend after putting in the high of the year?
In our opinion, most headlines since the new US administration have already been priced in by market participants.
Crude oil fundamentals—encompassing supply, production, and demand outlook—are likely to influence prices more significantly than headline news. Our analysis indicates that the market has rebalanced, trading above the Composite Volume Point of Control (CVPOC) at $68.45 per barrel, as derived from our 2022 anchored Composite Volume profile. Furthermore, the 2025 Volume profile is exhibiting a “b”-shaped formation, signaling a move toward balance in its lower range.
From a market auction perspective, two key price ranges are established:
Q4 2024 Lower Distribution: Approximately $65–$70, indicating a balanced market.
Q1 2025 Value Area: Approximately $70–$75, also reflecting balance.
In our analysis, it’s essential to adopt a broader view by examining higher timeframe levels to stay aligned with these key market levels. While intraday or intrawork trends may display bearish or bullish momentum, the overall market auction framework suggests further consolidation within these ranges—unless new developments significantly alter the crude oil fundamentals or breaking headlines emerge that have yet to be priced in.
Key Levels to Watch
Key levels represent areas of interest and zones of active market participation. The more significant a key level, the closer we monitor it for potential reactions and trade setups in alignment with our trading plan.
Jan 2024 CVPOC and mCVPOC Q4 2024 confluence: 68.45 - 68.25
Key Bull Support/LIS: 69.90 - 70.50
Feb 2025 VAL: 70.80
2025 mCVPOC: 72.82
Feb 2025 VAH: 72.70
mCVAH/Jan 2025 mid: 74.96 - 74.80
Scenario 1:
Price gets above key support to further consolidate within Feb 2025 Value Area
Scenario 2:
Intraday bullish price action with higher lows that fails to gain momentum above the 2025 VPOC.
Scenario 3:
Price holds below Yearly Open and LIS key support. A bearish head and shoulders pattern develops to push prices lower to test CVPOC 2022.
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