WTI oil futures (February delivery) have been trending downwards since June but managed to regain some ground after finding their feet at the one-year low of 70.30. In the near term, the price is challenging the 50-day simple moving average (SMA), which has repeatedly rejected the commodity’s rebound.
The momentum indicators currently suggest that bullish forces are strengthening. Specifically, the stochastic oscillator is ascending in the overbought zone, while the RSI has crossed above its 50-neutral mark.
If buyers manage to push the price above the 50-day SMA, the recent resistance region of 81.50 could reject further advances. Breaking above that zone, the price may challenge the 83.30 hurdle. Conquering this barricade, the bulls might aim for the November high of 92.50, which overlaps with the 200-day SMA.
On the flipside, if the positive momentum wanes and the price reverses lower, the September bottom of 76.25 could act as the first line of defense. Diving beneath that region, the recent support of 72.46 may come under examination. A break below that zone could set the stage for the one-year low of 70.30.
In brief, WTI oil futures seem to be attempting a recovery but the 50-day SMA continues to act as a solid ceiling. Hence, a break above the latter could spark a rally to the upside.
