WTI crude oil traded higher yesterday, breaking above the downside resistance line drawn from the high of March 6th. Today, the price emerged above the high of April 21st, at 105.90, a move suggesting that the outlook may be changing back to positive. However, we will adopt a neutral stance for now, and we prefer to wait for a clear break above the high of April 18th, at 109.55, before we start examining the case of a bullish reversal.
Such a break will confirm a forthcoming higher high on the daily chart and may pave the way towards the peak of March 25th, at 115.85, the break of which could target a hurdle slightly higher, at 118.20, marked by the high of March 24th. If the latter barrier is not able to stop the bulls either, then its break could carry larger bullish implications, perhaps paving the way towards the high of March 9th, at 127.35.
Shifting attention to our short-term oscillators, we see that the RSI lies slightly below 70 and points up, while the MACD runs above both its zero and trigger lines. Both indicators detect strong upside speed and support the notion for further advances in the black liquid. Nonetheless, we repeat that we prefer to wait for a break above 109.55.
On the downside, we would like to see a clear dip below 94.75 before we start examining the bearish case. The price will not only be well back below the aforementioned downside line, but the dip below 94.75 will confirm a forthcoming lower low on the daily chart. The 94.75 zone has been acting as a temporary floor since February 27th. The bears could initially dive towards the 88.65 or 86.45 zones, marked by the lows of February 9th and January 31st respectively, and if they don’t want to stop there, we may see them pushing towards the low of January 24th, at 82.50.
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