WTI futures remains bearish despite recent pullback


WTI oil futures appears to be sustaining its very short-term bearish picture despite the oscillators currently reflecting an improvement in positive momentum. Further aiding the move south are the downward sloping 20-, 50- and 100-period simple moving averages (SMAs) and their bearish crossovers of the 200-period SMA.

The MACD, deep in the negative zone has climbed above its red trigger line, while the RSI, currently in the oversold territory, is flirting with the 30 level. Noteworthy though, is the restrictive trendline and the location of the RSI and the MACD, which signal that a revival of the decline could unfold if seller’s pickup.

If selling interest picks up, initially the 52.44 support and the fresh three-and-a-half month low of 52.12 could challenge the bears. Steering underneath the low, the more important region of 50.98 (from 3 October 2019) to 50.51 (from 7 August 2019) – which also encapsulating the June 2019 troughs – could halt a further sell-off towards the 49.39 barrier.

Alternatively, if buyers push higher, first resistance comes at the 53.68 level ahead of the 20-period SMA at 54.12. Next, the down sloping trendline around the inside swing low of 54.75 could interrupt the test of the 55.32 resistance, which is the 23.6% Fibonacci retracement of the down leg from 65.61 to 52.12. Overcoming this, the 50-period SMA at 56.54 could deter the price testing the 38.2% Fibo of 57.29, while a more sustained climb could stretch towards the 100-period SMA and 50.0 Fibo of 58.89, located at the swing high.

Overall, the very short-term bias is bearish and a dive below the 50.51 low could see a sell-off unfold in oil futures.

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