WTI Crude Oil Technical Analysis and Short-Term Forecast
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WTI crude oil’s corrective move down accelerated today. Prices settled below the 20-day moving average, the 62 percent retracement of the rise from $80.3, and the $84.55 confirmation point of a double top that formed around $87.65. The daily Kase Trend indicator is now bearish and the 10-day DMI had a bearish crossover. The $82.56 equal to (1.00) target of the wave down from $87.67 held, so a test of resistance might occur first. Even so, today’s $84.0 midpoint is expected to hold because the move down should now fulfill the $81.5 target of the double top within the next few days. Settling below $81.5 will call for the $81.1 intermediate (1.382) target and possibly the $80.3 larger than (1.618) target of the wave down from $87.67 to be fulfilled.
The aggressive nature of today’s move down likely reflects a bearish shift in near-term sentiment. Nevertheless, the move down is still a correction and would have to take out the last major swing low of $80.3 to suggest further that a reversal is underway. Also, because $82.6 held on a closing basis there is a modest chance for a test of resistance first. As stated, today’s $84.0 midpoint is expected to hold. Overcoming this would call for a test of key near-term resistance and the 38 percent retracement of the decline from $87.67 at $84.5. This was major support that has now become resistance given $84.5 is also in line with the $84.55 confirmation point of the confirmed double top.
