WTI Crude Oil Technical Analysis and Short-Term Forecast
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May WTI crude oil’s wave up from $75.64 favors an eventual test of its $110.2 equal to (1.00) target. However, today’s pullback from $106.86 engulfed Monday’s long-legged doji. An intraday head and shoulders pattern with a complex right shoulder also formed, and the wave down from $106.86 favors a test of $98.8. This will break the neckline of the head and shoulders pattern around $99.5. Closing below $98.8 will also open the way for a test of $95.2 and possibly the head and shoulders’ target at $92.5, which is in line with the 62 percent retracement of the rise from $84.37. Therefore, the outlook for the next day or so leans in favor of a deeper test of support due to today’s bearish engulfing line and the intraday head and shoulders pattern.
Nevertheless, even in the case that the pullback from $106.86 extends, the move down is likely a correction of the broader uptrend. There is a modest chance for a test of the $104.2 smaller than (0.618) target of the wave up from $99.43 early Wednesday. This is also in line with the 62 percent retracement from $106.86. Overcoming $104.2 will imply that the corrective pullback is complete. In this case, look for a test of $107.5, a close above which will put the near-term odds back in favor of May WTI rising to challenge the highly confluent $110.2 threshold.
