Oil Prices have been bearish, but stabilized last week. Let’s take a look at the WTI Crude Oil charts.
Consolidation: WTI Crude came down to 44.21 before consolidating last week. During this consolidation, it has mostly maintained the bearish bias as price remained under the 100- and 200-period SMAs. If it falls below 47.50, it would cross under the 50-period SMA as well as a rising speedline from 44.21 and thus revive full-blown bearish outlook in the 4H chart. This would put pressure on the 44.21 low with risk of breaking lower towards the 40-handle.
Resistance: Note that 50 is becoming a key resistance, and WTI is bearish below 50. Also, note that the 4H RSI has tagged 60, but again held below, which reflects maintenance of the prevailing bearish momentum.
More Resistance: Now, if price DOES break above 50, the next 2 key resistance levels will be 52-52.50, then 54-54.50. A break above 55 would likely reflect a major consolidation against the 2014-decline.
Key Support Below 40: When we look at the monthly chart, we can see that 40 is indeed a key level, as it represents a common low in 2009, above the low reached by tails in the monthly chart, around 33.55.This is a key support level from which a 2-year rally developed. With the monthly RSI in oversold condition, we should therefore look for support around and below 40. In other words, there is still room to fall after last week’s consolidation.
Now, from if price does indeed find support below 40, the bullish outlook from there might be limited to 60, a previous support area in 2009-2010, and in late 2005 through 2006.
Previous Post by Author: EUR/JPY Finds Support at the 2014-Lows