WTI crude oil traded higher yesterday, after it hit the upside support line drawn from the low of Aug. 22, slightly below the 81.22 level, marked by the lows of Oct. 20 and 21. Overall, as long as WTI is trading above that upside line, we consider the outlook positive.
If the bulls stay in the driver’s seat, we would expect the action to move above the 83.65 barrier, and aim for the peak of Oct. 25, 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 following support may be the 88.10 level, marked by the inside swing low of Oct. 2 of that year, the break of which could extend the trend towards the peak of Oct. 7, 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.
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 Aug. 22. The bears may push the action towards 76.07. The break of which could allow extensions towards 73.80 or 72.95, marked by the lows of Sept. 29 and the inside swing high of Sept. 16.
