Crude Oil Vulnerable as Recent Drop Pushes Retail Traders to Build Upside Exposure
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<h2>Crude Oil, WTI, Retail Trader Positioning, Technical Analysis – IGCS Commodities Update</h2>
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<li><span>Crude oil prices</span><span> fell the most over 2 days since early June</span></li>
<li><span>Retail traders are increasingly building upside exposure</span></li>
<li><span>This is an early warning sign that WTI may continue lower</span></li>
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<p>Over the past 2 days, crude oil prices have fallen more than -3.4 percent. This marked the worst 2-day performance since early June. In response, retail traders have begun increasing upside exposure. This can be seen by taking a look at IG Client Sentiment (IGCS), which often works as a contrarian indicator. With that in mind, could further pain be in store for oil next?</p>
<h3>Crude Oil Sentiment Outlook – Bearish</h3>
<p>According to IGCS, only about 45% of retail traders are net-long crude oil. Since most are still biased to the downside, this continues to suggest price may rise down the road. That said, upside exposure has increased by 8.8% and 11.11% compared to yesterday and last week, respectively. With that in mind, recent changes in bets warn that the current price trend may soon reverse lower.</p>
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<span><br />
<span data-stream-type="sentiment" data-market- data-value="–" data-type="long-value-info"><br />
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<span>of clients are </span><span>net long.</span> </span><br />
<span><br />
<span data-stream-type="sentiment" data-market- data-value="–" data-type="short-value-info"><br />
</span><br />
<span>of clients are </span><span>net short.</span> </span>
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Change in </td>
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Longs </td>
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Shorts </td>
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OI </td>
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<td>Daily</td>
<td>11%</td>
<td>-9%</td>
<td>0%</td>
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<td>Weekly</td>
<td>15%</td>
<td>-24%</td>
<td>-10%</td>
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<p><img decoding="async" loading="lazy" src="https://a.c-dn.net/b/0slRcW/image1.png" alt="Oil – US Crude Client Positioning" data-image-original-width="1800" data-image-original-height="1200" width="1800" height="1200" class="dfx-lazyload" style="padding-bottom: calc(1200 / 1800 * 100%);" /></p>
<p>On the daily chart below, we can see that WTI has effectively rejected November highs, which make for a zone of resistance between 92.43 – 93.72. This also followed negative RSI divergence, which showed that upside momentum was fading. Since then, prices have extended lower, recently taking out the 20-day moving average.</p>
<p>Oil is also testing a push under the 61.8% Fibonacci extension level at 88.75. Confirming a breakout lower may open the door to an increasingly downward technical bias. Such an outcome places the focus on the 50-day moving average, and the 84.84 inflection point from August. These may hold as support.</p>
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<h3>Crude Oil Daily Chart</h3>
<p><img decoding="async" loading="lazy" src="https://a.c-dn.net/b/3nBuub/image2.png" alt="Crude Oil Daily Chart" data-image-original-width="1374" data-image-original-height="733" width="1374" height="733" class="dfx-lazyload" style="padding-bottom: calc(733 / 1374 * 100%);" /></p>
<p><span>Chart Created in Trading View</span></p>
<p><span>— Written by Daniel Dubrovsky, Senior Strategist for DailyFX.com</span></p>
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<br /><a href="https://www.dailyfx.com/analysis/crude-oil-vulnerable-as-recent-drop-pushes-retail-traders-to-build-upside-exposure-20231002.html">Source link </a></p><p>The post <a href="https://forextraderhub.com/crude-oil-vulnerable-as-recent-drop-pushes-retail-traders-to-build-upside-exposure.html">Crude Oil Vulnerable as Recent Drop Pushes Retail Traders to Build Upside Exposure</a> first appeared on <a href="https://forextraderhub.com">Forex Trader Hub</a>.</p>
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