WTI futures surge to a five-month high [Video]

 

WTI oil futures (May delivery) have been in a slow but constant recovery from their December bottom of $67.97, posting a fresh five-month peak of $86.20 on Wednesday. Meanwhile, the 50-day simple moving average (SMA) is positively closing the gap with the 200-day SMA, where an upside violation could ignite more gains.

Should the advance resume, there is no prominent resistance until $89.23, which is the 78.6% Fibonacci retracement of the $95.02-$67.97 downleg and a region that acted as resistance in October 2023. Jumping above that zone, the price may challenge the October 2023 resistance of $92.40. Even higher, the 2023 peak of $95.02 might prevent further advances.

Alternatively, bearish actions could send the price lower to test the 61.8% Fibo of $84.69. A violation of that region could pave the way for the March resistance of $83.10 ahead of the 50.0% Fibo of $81.50. Further retreats could then come to a halt at the March support of $80.30.

In brief, WTI futures’ rebound accelerated following the breakout move from the pennant structure in late March, resulting in consecutive fresh five-month peaks. However, the risk of a pullback is growing given that technical indicators are warning of an overstretched advance.