WTI oil futures aim for recovery after sharp sell-off [Video]
|WTI oil futures (January 2022 delivery) faced the largest monthly decline since the start of the pandemic in November, with the price plunging well below its simple moving averages (SMAs) to meet support around a three-month low of 64.42 on Tuesday.
WTI oil futures (January 2022 delivery) faced the largest monthly decline since the start of the pandemic in November, with the price plunging well below its simple moving averages (SMAs) to meet support around a three-month low of 64.42 on Tuesday.
Despite a bearish start to the new month, oil could see its fortunes improving in the coming sessions as technical indicators are flashing oversold conditions. Particularly, with the market closing constantly below the lower Bollinger band during the past couple of days, the RSI forming a bullish double bottom below its 30 oversold level, and the Stochastics fluctuating below their 20 oversold mark, there is an increasing potential for a bullish bounce.
The 78.6% Fibonacci of the 61.27 – 85.39 upleg is currently limiting bullish flows around 66.88. Should it give way, the door would open for the 61.8% Fibonacci of 69.33 and the 200-day SMA slightly above. Then, if buying forces persist, the price could speed up towards the 50% Fibonacci of 73.62.
In the event sellers dominate below 64.42, the spotlight will shift straight to the August low of 61.77.A break below that floor could push some medium-term traders out of the market as well, likely bringing the 2021 March trough of 57.25 next on the radar.
Summarizing, WTI oil futures look bearish but oversold in the short-term picture. A step above the nearby resistance of 66.88 is expected to enhance buying appetite.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.