WTI edged north during the European morning Tuesday, breaking above the upper bound of a symmetrical triangle formation that has been containing the price action since late January. With that in mind, and also taking into account that the price continues to trade above the longer-term uptrend line drawn from the low of the 21st of June, we believe that the outlook has turned back to positive.
Currently, WTI looks to be heading towards the 63.15 resistance obstacle, defined by the peak of the 6th of March. A decisive break above that level may set the stage for more upside extensions, perhaps towards our next resistance hurdle of 64.05, marked by the peak of the 26th of February.
Turning our attention to the short-term oscillators, we see that the RSI rebounded from near 50 and now appears ready to challenge its 70 line, while the MACD stands above both its zero and trigger lines. Both these indicators reveal positive momentum and support the case for the liquid to continue trading north for a while more.
On the downside, a move back within the triangle will push us to the sidelines. We would like to see a dip below the lower end of the formation and the 60.15 support before we start assuming that the short-term outlook has turned negative. Such a break could initially aim for the 59.60 support, marked by the low of the 15th of February. Another dip below 59.60 could carry more bearish implications and could pave the way towards the 58.20 territory.
Having said all these, even in the case of the aforementioned declines, the price would still be trading above the longer-term uptrend line drawn from the low of the 21st of June. As such, although we would turn negative for the short run, we would maintain the view that the broader picture remains cautiously positive.
