WTI Crude Oil Technical Analysis and Short-Term Forecast
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WTI crude oil rose as expected today and overcame the $72.34 swing high, invalidating a few of the waves down from $77.7 and $75.45 that had called for a continued decline. Prices also overcame the smaller than (0.618) target of the wave up from $66.72 and the 50 percent retracement of the decline from $77.7 at $72.2. This objective held on a closing basis but prices have risen back to $72.2 late this afternoon.
The move up is now poised to challenge the 62 percent retracement of the decline from $77.7 at $73.5 and then the $74.2 equal to (1.00) target of the wave up from $66.72. Overcoming a minor target at $72.8 will clear the way for tests of $73.5 and $74.2. The $74.2 objective is crucial because it is also in line with the smaller than target of the wave up from $65.99 and the 200-day moving average. Settling above $74.2 should initially be a challenge but would confirm a bullish outlook and call for the $75.2 smaller than target of the new primary wave up from $64.16 to be challenged.
The challenge for WTI crude oil is that each time it has approached a level that would indicate prices will move much higher or lower in recent months a reversal has taken place. This proved to be true at the $67.3 level and could prove to be the case again at $74.2.
Also, because $72.2 held on a closing basis there is a modest chance for a test of support before rising to challenge $73.5 and $74.2. Taking out $70.9 will call for a test of the 38 percent retracement of the rise from $66.72 at $70.4. A simple correction should hold $70.4. Falling below this would call for key support at $68.9 to be challenged. This level is key because it is the 62 percent retracement of the rise from $66.72 and a decline to $68.9 would take out the $69.32 corrective swing low of the wave up from $66.72 that makes the connection to $74.2 as the equal to target.
