WTI Crude Oil Technical Analysis and Short-Term Forecast
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WTI crude oil’s uptrend is intact but has been due for a correction. Friday’s confirmed evening star, Monday’s long-legged doji, and daily bearish weak KaseCD and MACD divergences indicate a solid test of support should take place before the uptrend extends. Furthermore, Tuesday’s decline took out the smaller than (0.618) target of the wave down from $87.63 and the equal to (1.00) target of the wave down from $87.1. Therefore, the corrective move down is poised to test at least $84.7 and likely the $84.1 equal to target of the wave down from $87.63. Settling below $84.1, which is also the 50 percent retracement of the rise from $80.3, will call for an extended correction to challenge this wave’s $83.0 intermediate (1.382) and $82.3 larger than (1.618) targets in the coming days.
Taking out the $85.3 target has increased the odds for a deeper test of support. However, this is still a somewhat tight call for the near term because similar corrections in recent weeks have been short-lived. Should WTI crude oil turn higher and overcome the $86.6 smaller than target of the wave up from $84.69 the odds for a deeper test of support will be significantly dampened. In this scenario, look for a test of key near-term resistance at $87.5. Settling above $87.5 would confirm that the correction is complete and shift near-term odds in favor of rising to $88.4 and likely $89.1.
