WTI has been in a recovery mode since Wednesday, when it hit support at 94.85, fractionally below the upside support line drawn from the low of January 24th. The advance was stopped near the 106.80 barrier, and then the black liquid pulled back, but it remains above the aforementioned upside line. As long as this condition is met, we will see decent chances for another rebound and further advances.
The current retreat may continue for a while more, but the bulls may recharge from near the 100.40 zone, marked by the inside swing high of March 16th. This may result in a rebound back near the 106.80 barrier, the break of which will confirm a forthcoming higher high, and may initially target the 110.65 level, marked by the high of March 11th. If that barrier doesn’t hold, then we may experience extensions towards the 115.25 zone marked by the high of March 10th, or the 117.60 hurdle, marked by the inside swing low of March 8th.
Shifting attention to our short-term oscillators, we see that the RSI, although above 50, has turned down again, while the MACD lies above its trigger line, and has just obtained a positive sign. Both indicators detect positive momentum, supporting the notion that a rebound could be looming soon, but the fact that the RSI turned down adds more credence to our view over some further retreat before the next positive leg.
On the downside, we would like to see a drop below 94.85 before we assume that the bears have gained the upper hand. This could confirm the break below the upside support line drawn from the low of January 24th, and may initially test the 92.60 zone, which provided support between February 22nd and 25th. If that level doesn’t hold, then we may experience declines towards the 89.05 or 86.65 barriers, marked by the low of February 18th and February 1st, respectively. Another break, below 86.65 could extend the slide towards the low of January 24th, at 82.25.
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