Outlook for WTI
March WTI crude oil’s formation of a second daily star (in this case a hammer), confirmed daily KCDpeak, oversold Stochastic, and failure to break the $58.07 swing low are all factors that indicate the upward correction from $58.07 still has a reasonable chance of extending before the decline continues. However, unless WTI settles above at least $59.8 and more likely $60.4 to confirm the morning star setup (made up of the aforementioned stars) odds will continue to favor a decline.
Initial support is the $58.39 swing low, and an early move below this tomorrow will call for $58.0, the smaller than (0.618) target of the wave $60.83 – 58.39 – 59.49. This is a key objective because it is the lowest that the initial wave down from $66.66 projection and is the 38 percent retracement of the move up from this past summer’s $43.91 swing low. Settling below $58.0 will open the way for $57.6 and very likely $57.1, the equal to (1.00) target of the wave down from $60.83.
Should the upward correction attempt to extend again tomorrow, look for initial resistance at last Friday’s $59.8 midpoint. This is the completion point of the morning star setup, a close above which would call for the $60.4 confirmation point. The $60.4 level is key for the near-term because it is also sitting just above the smaller than target of the wave up from $58.07. Settling above $60.4 would call for a likely move above the $60.83 swing high to $61.4, which is in-line with the equal to target of the wave up from $58.07 and the 38 percent retracement of the decline from $66.66.
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