WTI Crude Oil Technical Analysis and Short-Term Forecast
The outlook for WTI crude oil remains bearish based on the aggressive decline from $76.07. However, the move down stalled just below the $65.2 larger than (1.618) target of the primary wave down from $76.07 today. Currently, the decline looks like a three-wave correction, but there is a good chance that resistance at $69.0 will hold and the decline could transmute into a five-wave trend that targets $59.5 and possibly $58.4. Such a deep test of support is unlikely without more bearish help from external factors. Nonetheless, falling below $66.0 will call for a test of $65.3 and likely $64.1 during the next few days. Settling below $64.1 would imply that the move down is a five-wave trend and increase odds for a test of targets below $60.0.
With that said, today’s move up from $65.01 helped shape a daily bullish hammer. This is a reversal pattern that warns the corrective move down might already be complete. To complete the hammer WTI must close above $69.0. The connection to $69.0 is made through $68.1, which is the smaller than (0.618) target of the intra-day wave up from $65.01. Settling above $69.0 would then call for a test of the hammer’s $71.1 confirmation point. Closing above this would strongly suggest the move down is complete and call for $71.9 and higher.
This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial
