WTI crude oil traded higher yesterday, after it hit support at the upside support line drawn from the low of August 22nd, slightly below the 81.22 level, marked by the lows of October 20th and 21st. Overall, as long as WTI is trading above that upside line, we would consider the outlook to be positive.
If the bulls are willing to stay in the driver’s seat, we would expect them to push the action above the 83.65 barrier, and perhaps aim for the peak of October 25th, at 85.73. A break higher would confirm a forthcoming higher high on both the 4-hour and daily charts and take the price into territories last seen in 2014. The next support may be the 88.10 level, marked by the inside swing low of October 2nd of that year, the break of which could extend the trend towards the peak of October 7th, 2014, at 90.60.
Shifting attention to our short-term oscillators, we see that the RSI rebounded and just crossed above its 50 line, while the MACD, although negative, lies above its trigger line, pointing up and getting closer to zero. Both indicators suggest that WTI may start gaining upside speed again soon and support the notion for some further advances, and maybe a trend continuation.
We will start examining the case of a bearish reversal only upon a dip below 78.70. A forthcoming lower low would already be confirmed, while WTI will also be well below the upside line taken from the low of August 22nd. The bears may get encouraged to push the action towards the 76.07 barrier, the break of which could allow extensions towards the 73.80 or 72.95 hurdles, marked by the lows of September 29th, and the inside swing high of September 16th.
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