WTI crude oil traded lower yesterday, after it hit resistance at 83.65. That said, the slide was stopped near the 78.70 zone, and then, it rebounded somewhat. Overall, the black liquid stays below the prior upside support line drawn from the low of August 20th, and thus, we would consider the short-term outlook to be somewhat negative for now.
A clear and decisive dip below 78.70 could add credence to the view that the bears have gained the upper hand, and may pave the way towards the 76.07 zone, which provided resistance on September 29th, 30th, and October 1st. If the rate falls below that hurdle, then we may experience extensions towards the 72.95 - 73.80 territory, defined by the lows of September 24th and 29th respectively.
Our short-term oscillators though suggest that some further recovery may be on the cards before the next leg south. The RSI turned up after hitting support slightly above its 30 line, while the MACD, although it lies below both its zero and trigger lines, shows signs of bottoming.
However, we will abandon the bearish case only if the rebound extends above the 85.73 barrier, which is marked by the high of October 25th. This will take WTI into territories last seen back in October 2014, with the next possible resistance zone being the peak of October 9th of that year, at around 88.10. Another break, above that hurdle, could extend the advance towards the peak of October 7th, 2014, at around 90.60.
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