WTI oil traded slightly higher today after hitting support at 117.78 yesterday. At the time of writing, it is flirting with the 121.75 barrier, where a break would confirm a forthcoming higher high. This, combined with the fact that the price is trading above the upside support line drawn from the low of May 11, paints a positive short-term picture.
As we already noted, a break above 121.75 will confirm a forthcoming higher high, which could pave the way towards the 127.30 zone, marked by the high of Mar. 9. There, the bulls may decide to take a break, thereby allowing the price to correct lower. Still, if they recharge from above the aforementioned upside line, we could see them climbing above that zone and aiming for the 130.05 area, which stopped further advances on Mar. 7 and 8. Another break above 130.05 could pave the way towards the psychological number of 135.00.
Shifting attention to our short-term oscillators, we see that the RSI lies above 50 and points up, while the MACD runs above both its zero and trigger lines. Both indicators detect upside speed and support the notion of further advances in the black liquid.
To start examining the bearish case, we would like to see a clear dip below 116.23. This would confirm a forthcoming lower low on the 4-hour chart and could initially pave the way towards the 112.70 territory, marked by the low of Jun. 2, or the 110.41 barrier, marked by the low of May 24. Another break, below 110.41, could carry larger declines, perhaps towards the low of May 19, at 105.47.