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Technical Analysis – WTI crude oil futures bearish outlook in place

OIL-DEC18H4061118| EconAlerts


WTI crude oil futures hover above 7-month low; bearish outlook in place.

WTI crude oil futures sank to a new seven-month low of 62.51 on Monday, recording the sixth consecutive bearish day. Prices remain below the simple moving averages (SMAs) in the 4-hour chart and are hovering slightly above the aforementioned low.

Having a look at the technical indicators, the blue %K line of the stochastic oscillator is turning up, ready to create a bullish crossover with the red %D line. Moreover, the MACD oscillator stands above the trigger line in negative territory. These are signaling a potential change of momentum to the upside in the short-term and the very short-term.

Should the price manage to strengthen its negative bias and post a significant leg below the seven-month low, the next support could come around 61.77, taken from the low on April 6. A break below this area would shift the bias to a more negative one and open the way towards the 60.15 level.

On the flipside, if prices rebound from the recent low, they could touch the 20-SMA near 63.44 at the time of writing, before heading towards the 64.10 resistance level. Further improvement could drive oil prices until 65.40, given that the 40-SMA at65.00 is broken first. A penetration of this hurdle could send the price even higher until the 23.6% Fibonacci retracement level of the down-leg from 76.90 to 62.50, around 65.90, breaking the short-term descending trend line to the upside.

To summarise, WTI crude shifted the bullish outlook to negative, especially after the slip below the 64.00 psychological level. In the short-term, the price has been mostly declining since October 3.

OIL-DEC18H4061118| EconAlerts



 

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Disclaimer:
This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.


Source: XM

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