Is Crude Oil WTI Bottoming?

The short answer is not. Crude oil WTI prices are either to linger at current prices or go lower below $35.  I am more inclined to beleive that the price will go towards the $25 as shown in the chart below.

wti

IRONFOREX

WTI breaks above a short-term downtrend line

wti

IRONFOREX

WTI broke above a short-term downtrend line on Wednesday, and on Thursday last week, it traded in a quiet mode staying above the 37.35 (S1) support line. As long as the price is trading above the aforementioned downtrend line, I see a cautiously positive near-term picture. However, looking at our momentum indicators, I see signs that a negative corrective move could be looming before buyers decide to take the reins again. The RSI has exited its above-70 zone, while the MACD, although positive, has topped and could move below its trigger line soon. A dip back below 37.35 (S1) is likely to confirm the notion and could aim for the next support at 36.60 (S2). On the daily chart, I see that WTI has been printing lower peaks and lower troughs since the 9th of October. As a result, I would consider the longer-term picture to stay negative and I would treat the recovery from 35.30 (S3), or any extensions of it, as a retracement of that negative medium-term downtrend.

• Support: 37.35 (S1), 36.60 (S2), 35.30 (S3)

• Resistance: 39.00 (R1), 40.00 (R2), 41.00 (R3)

IRONFOREX

 

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