Technical Analysis – WTI crude oil opens the way for bearish actions
May 24, 2024 7:28 am
WTI drops below diagonal line
20- and 200-day SMAs post death cross
RSI flattens and Stochastics hold in oversold region
WTI crude oil with delivery in July is plummeting from the 80.00 level, which is acting as a strong resistance obstacle as well as the 200-day simple moving average (SMA). The commodity slipped beneath the medium-term ascending trend line, suggesting more declines in the market.
To attract new buyers, the bulls will have to surpass the nearby resistance of the uptrend line at 78.20 and move beyond the bearish cross within the 20- and the 200-day SMAs near the 80 level. Another successful battle there could see the price jumping to the 50-day SMA at 81.40.
However, the mixed technical indicators are not convincing traders of the bullish scenario. The narrowing SMAs indicate a potential downside move but the direction is unclear as the flattening RSI is suggesting the end of bearish action, but the stochastic oscillator keeps lacking power in the oversold region.
Hence, a downside correction could still be possible in the coming sessions. If the pair slumps below the 76.58-75.80 range, it could stabilize near the 71.50 mark. Otherwise, the sell-off could expand towards the 70.60 support disappointing medium-term traders.
Summing up, oil prices have not eliminated downside risks yet, as they remain beneath important barriers. To boost buying confidence, WTI will need to crawl above 80.00 level.
WTI drops below diagonal line
20- and 200-day SMAs post death cross
RSI flattens and Stochastics hold in oversold region
WTI crude oil with delivery in July is plummeting from the 80.00 level, which is acting as a strong resistance obstacle as well as the 200-day simple moving average (SMA). The commodity slipped beneath the medium-term ascending trend line, suggesting more declines in the market.
To attract new buyers, the bulls will have to surpass the nearby resistance of the uptrend line at 78.20 and move beyond the bearish cross within the 20- and the 200-day SMAs near the 80 level. Another successful battle there could see the price jumping to the 50-day SMA at 81.40.
However, the mixed technical indicators are not convincing traders of the bullish scenario. The narrowing SMAs indicate a potential downside move but the direction is unclear as the flattening RSI is suggesting the end of bearish action, but the stochastic oscillator keeps lacking power in the oversold region.
Hence, a downside correction could still be possible in the coming sessions. If the pair slumps below the 76.58-75.80 range, it could stabilize near the 71.50 mark. Otherwise, the sell-off could expand towards the 70.60 support disappointing medium-term traders.
Summing up, oil prices have not eliminated downside risks yet, as they remain beneath important barriers. To boost buying confidence, WTI will need to crawl above 80.00 level.
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