WTI crude oil traded higher yesterday and continued marching north today as well, breaking above last Thursday’s high of 62.20, thereby confirming a forthcoming higher high. However, did not move much higher and pulled back to settle near that barrier. Overall, the black liquid trades well above the upside support line drawn from the low of January 4th, and thus, we would consider the near-term outlook to be positive.
The retreat may continue for a while more, but we see decent chances for the bulls to take charge again from near the 60.95 barrier, marked by the high of Feb. 15. If so, we may see the bulls targeting once more the 62.20 hurdle, where a decisive break may, this time, push the battle towards the high of Jan. 3, 2020, at 64.10. Slightly higher we have the peak of Jan. 6, 2020, which may provide resistance if the 64.10 fails to do so.
Looking at our short-term oscillators, we see that the RSI turned down after hitting its 70 line, while the MACD lies above both its zero and trigger lines. Both indicators detect upside speed, but the fact that the RSI has turned down after hitting 70 adds to our view that a small setback may be looming before the next positive leg.
Now, in case the price falls below 60.25, which is Friday’s inside swing high, then we will start examining the likelihood of a deeper correction to the downside. The bears may temporarily take control and push WTI towards Friday’s low, at 58.55. A clear break below that barrier may extend the fall towards the low of Feb. 12, at 57.35, or towards the aforementioned upside line.