WTI Price Analysis: Looks south as technical setup turns in favor of bears
|- WTI wavers in a pennant on 4H, with risks tilting to the downside.
- US oil breaches 50-SMA on 4H, RSI turns bearish.
- A close below $41 is critical for the sellers to extend control.
WTI (futures on NYMEX) has tumbled alongside stocks in the European session, as the appetite for the riskier assets is almost killed amid surging coronavirus cases globally, which once again puts the economic recovery at stake.
From a technical perspective, the four-chart shows that the odds have turned in favor of the bears, as the price slips towards the lower end of the two-week-old pennant formation.
On its southwards journey, the WTI has cut the 21-simple moving average (SMA) at 41.67 while challenging the 50-SMA support at 41.40, as of writing.
A sustained break below the latter could expose the rising trendline support at 40.97. The WTI needs to close the four-hour candle below that level to confirm a pennant breakdown.
The bearish breakdown will open floors towards the horizontal at 200-SMA support of $39.90.
The Relative Strength Index (RSI) points south and has pierced the midline from above, currently at 47.81, allowing for more declines.
To the upside, 21-SMA will offer immediate resistance. Any follow-through buying interest could challenge the daily high of 42.10.
The next relevant cap awaits at 42.50, the psychological magnate.
WTI 4-hour chart
WTI additional levels
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