Bottom line: WTI Crude might be turning bullish against 19.30 levels going forward. A meaningful low might be in place today and a break above 25.00 would confirm.
Technical Analysis:
WTI Crude might have completed its drop that had begun since 65.62 levels in January 2020. After almost 11 weeks of printing lower lows and lower highs, a potential bottom might be just in place at 19.30 levels. The commodity is seen to have rallied over 6% since then and is trading around 21.56 (spot) at this point in writing.
Immediate resistance is seen around 25.20 levels, the March 25 high and a break above that would confirm that a meaningful bottom is in place at 19.30. Furthermore, the rally could continue towards 33.00 levels, which is fibonacci 0.382 retracement of the drop between 54.45 and 19.30 respectively.
Most traders might be willing to initiate fresh long positions around current price (21.50/60), with protective stop just below 19.30 and projected targets above 25.00 and 33.00 respectively. More conservative trading approach might be to remain flat for now and allow prices to break above resistance at 25.20. It might be considered safe to buy on dips thereafter as most traders might remain inclined to push towards 33.00 levels.
The structure since 76.88 highs in October 2018, might have unfolded as a combination and could be complete at 19.30 today. Alternately, WTI Crude might witness yet another low after hitting resistance around the 33.00 mark. We would evaluate the structure again once 33.00 levels are reached and determine potential direction going forward.
Overall, WTI Crude might have carved an intermediary low at 19.30 levels today. Bulls might be inclined to produce a meaningful counter trend rally towards 33.00 levels, if not further. An engulfing bullish candlestick pattern is emerging on the daily chart as we write.
Prepared by
Harsh Japee, Technical Analyst.
WTI Crude Chart
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