WTI Oil Drifts Lower But Strong Support Below

• WTI Oil continues to trade sideways, but bias is bearish
• Price remains constrained between key resistance and support levels

WTI Oil (Cash) is headed for a fifth straight day of declines, slipping below 69.00 and widening the gap with the Ichimoku cloud. The technical indicators are bearish, but to a varying extent. The stochastic oscillator is diving towards the oversold region, suggesting that an upside correction could be on the cards soon. However, the MACD is only marginally negative and remains above its red signal line, pointing to some bullish support as well as scope for greater losses.

In the immediate term, the main challenge for the bears is the ascending trendline that stands ready to defend the price at 68.60. But the fight doesn’t stop there. The 68.25, 67.25 and 66.75 regions have acted as strong barriers over the past few months. If these fail, the final test will be the September low of 65.68. Breaching this too would signal the resumption of the longer-term downtrend.

To the upside, the 50-day simple moving average (SMA) just below the 70.00 mark is the first major hurdle for the bulls. Higher up, the descending trendline and the bottom of the Ichimoku cloud pose a problem in the 70.90 zone. But for any positive momentum to gain traction, the price would need to climb above the shifting cloud tops of 72.32 and 72.88, before setting sights on the 200-day SMA around 76.25. However, for a stronger confirmation of a switch to a bullish outlook, the price needs to additionally surpass the October high of 78.96.

But for now, further consolidation is likely in the coming sessions.