WTI crude oil traded higher yesterday, but hit resistance near the 102.00 level, for the first time since July 2014, and then it pulled sharply back. However, the black liquid remains above the upside support line drawn from the low of January 24th, and thus, we would consider the short-term outlook to still be cautiously positive.
We believe that there is a decent chance for a rebound from near the 92.60 level, or the aforementioned upside line. However, in order to get confident on a trend continuation, we would like to see a clear break above 97.00. This may confirm the end of the current correction and perhaps encourage the bulls to aim for another test at 102.00. If they decide to break higher, they will confirm a forthcoming higher high, with the next potential resistance being at 104.00, marked by the highs of July 17th and 18th, 2014. Another break, above 104.00 could carry larger extensions, perhaps towards the 107.70 zone, which provided resistance between June 13th and 24th, 2014.
Turning our gaze to our short-term oscillators, we see that the RSI turned down and touched its toe back below its 50 line, while the MACD, although positive, lies below its trigger line. Both indicators suggest that there might be some more slide before the next leg south, and that’s another reason we prefer to wait for WTI to break above 97.00 before getting confident on a trend continuation.
In order to start examining the bearish case, we would like to see a clear dip below 89.05, a support marked by the low of February 18th. This could confirm the break below the upside line taken from the low of January 24th, and may initially aim for the 86.65 barrier, which supported WTI between January 26th and February 1st. A break lower could encourage the bears to dive towards the 82.25 or 80.50 zones, marked by the low of January 24th and the inside swing high of January 7th respectively, and if none of those two barriers is able to halt the slide, then we could see declines towards the low of January 10th, at 77.85.
Disclaimer:
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.82% of retail investor accounts lose money when trading CFDs with the Company. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.
Copyright 2022 JFD Group Ltd.