WTI traded higher yesterday, after hitting support near 55.60. That said, the advance was stopped by the 57.00 zone and today, the black liquid pulled back. Overall, WTI is still trading within the range that’s been containing most of the price action since August 9th, between 53.85 and 57.30. At the same time, it also trades below the tentative downside resistance line drawn from the high of April 23rd. Thus, we would stay flat for now, although the price is trading closer to the upper end of the aforementioned short-term range.
If the bears are willing to push the price lower, then we may see them targeting yesterday’s low again, near 55.60. That said, we would like to see a clear break below 55.35, a support marked by the inside swing high of August 26th, before we get confident on larger declines within the pre-discussed range. Such a dip may pave the way towards the lower end of the range, at around 53.85. If the bears are not willing to stop there either, then we could see them aiming for the 53.10 zone, near the low of August 25th.
Taking a look at our short-term oscillators, we see that the RSI topped from slightly below its 70 line, while the MACD, although above both its zero and trigger lines, shows signs of topping as well. Both indicators suggest weakening upside momentum and support somewhat the notion for some further retreat within the range.
On the upside, we would like to see a strong break above 58.03 before we start examining whether the bulls have gained full control. Such a break would not only drive the liquid above the upper bound of the short-term range, but also above the downside resistance line drawn from the high of April 23rd. We could then experience extensions towards the 58.90 area, slightly above the high of July 31st, the break of which may set the stage for the psychological round figure of 60.00.
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