Technical Analysis - WTI futures’ positive impetus under pressure



WTI oil futures fresh upside drive off the 67.68 level seems to have run out of fuel near the upper Bollinger band at 73.22. The simple moving averages (SMAs) are feeding the positive structure even though sellers are now making a stand.

The short-term oscillators are reflecting slight weakness in bullish forces. The MACD is strengthening above its red trigger line in the positive zone, while the RSI is marginally faltering in bullish territory. The stochastic lines in the overbought section are also signalling some limitations for positive price action. However, they have yet to confirm an increase in downward intensities.

If the commodity continues to lose steam, initial support could arise at the 70.59 inside swing high. Should the price pullback evolve further, the region between the 50- and 100-day SMAs at 69.45 and 69.06 respectively may provide some footing for the black liquid. Diving beneath these averages, sellers could meet the mid-Bollinger band at 68.62 before challenging the support base of 67.01-67.68.

Otherwise, if buyers resurface, primary upside friction could develop from the upper Bollinger band at 73.22. Extending past the upper Bollinger, nearby resistance may then emanate from the resistance band of 74.22-74.86 formed by highs over the second part of July. The next resistance obstruction could arise between the 76.04 barrier and the October 2018 rally peak of 76.87, an area that also includes the fresh near 33-month peak of 76.20. From here, more gains may target the 77.77 high, achieved in November 2014.

Summarizing, WTI oil futures are sustaining a positive demeanour above the 70.59 level and the 50- and 100-day SMAs. A break above 74.86 could boost upside momentum, while a drop below the 67.00 hurdle may strengthen negative tendencies.

 

 

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