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by Charalambos Pissouros

WTI Rebounds but Hits Resistance Near a Prior Uptrend Line

WTI has been in a rising mode since the 5th of June, when it hit support near the 64.10 barrier, also marked by the inside swing peak of the 5th of April. However, yesterday the recovery was paused near the crossroads of the 67.00 level and the prior medium-term uptrend line drawn from the low of the 30th of August 2017. Bearing in mind that the price is still trading below that line, we would consider the short-term outlook to still be somewhat negative, and we would see a decent chance for the bears to jump in near current levels.

If so, then we may see a slide aiming for another test near the 64.10 support zone, which if broken, could carry more bearish implications. Such a break could see scope for extensions towards our next support of 61.90, defined by the lows of the 4th and 8th of April, or the longer-term upside support line drawn from the low of the 21st of June 2017.

Looking at our daily oscillators, we see that the RSI has turned down from slightly below its 50 line, which supports somewhat the case for another leg down from current levels. The MACD lies within its negative territory, above its trigger line, but shows signs that it could start topping as well.

On the upside, we would like to see a clear move above 68.50 before we assume that the bears have abandoned the battlefield, at least in the near term. Such a break would confirm the return of the “black gold” above the aforementioned medium-term uptrend line and is possible to initially aim for our next resistance of 70.30. Another break above that level could prompt extensions towards the peak of the 22nd of May, near the 73.00 zone.

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