Recent momentum in WTI crude oil has pushed prices towards the key $71.00 level, testing the medium-term downtrend line. Positive bias is evident in momentum oscillators, signaling a potential upward trend.
After recovering from a bearish gap created last week, prices have surged over 6% in the past few days. Technical indicators are aligning with this upward movement, with the MACD oscillator crossing above its trigger line and the stochastic showing a bullish trend above the 20 zone.
If prices continue to rise above $71.00, the next resistance levels to watch are the 20- and 50-day simple moving averages at $71.80. Further resistance lies at $72.95 and $76.65 before reaching the significant 200-day SMA at $77.60.
On the downside, immediate support is seen at the $67.00 level, followed by a 17-month low of $65.70. A break below these levels could lead to further downside towards the April 2023 trough at $63.60.
In the medium term, a move above $78.75 is needed to shift sentiment from bearish to neutral, indicating a potential return to a more balanced market outlook.
Analysis:
The recent surge in WTI crude oil prices towards the $71.00 level indicates a potential reversal in the downward trend. Positive momentum indicators suggest a bullish bias in the market, with resistance levels at $71.80, $72.95, and $76.65. On the downside, support levels are at $67.00, $65.70, and $63.60. A break above $78.75 is needed for a shift towards a more neutral market sentiment.