- WTI oil futures complete bearish triangle pattern after Wednesday’s drop
- Bullish pressures could still resurface as long as the price holds above 81.50
WTI oil futures tumbled by 2.8% to 82.84 on Wednesday, experiencing one of their biggest daily losses so far this year after a short-period of consolidation.
The price slid below the key support of 84.14 and the 20-day exponential moving average (EMA), dissolving a descending triangle to the downside. This is usually a bearish chart pattern, indicating a potential trend reversal. In other discouraging signals, the negative slope in the RSI and the falling MACD are backing the ongoing selling appetite in the market.
Yet, with the stochastic oscillator entering the oversold territory below 20, selling pressures could prove short-lived, particularly if the nearby constraining line from the pandemic lows and the 50-day EMA halt the decline within the 81.50-82.00 area.
In the event the bears dominate below 81.50, they could head for the previous low of 80.30. Falling lower, the price might initially take a breather around the 200-day EMA at 79.00 before stretching towards the critical support trendline seen at 77.00. A decisive close below the latter might attract greater attention, as such a correction would violate the 2024 upward pattern, bringing the 61.8% Fibonacci of 75.21 next into view.
In the bullish scenario, the price bounces back above the 23.6% Fibonacci of 82.45, it could initially retest triangle’s boundaries within the 84.14-84.86 area. The resistance line drawn from December could be the next target near 86.60. If the bulls claim that bar this time, the rally could pick up steam towards the 89.20-90.00 zone.
In short, it appears that there is a resurgence of selling interest in WTI oil futures. Nevertheless, traders would like a confirmation below 81.50 to target lower levels.
