Commodities

Technical Analysis – WTI futures hover below ceiling; upside risks intact

Posted on December 31, 2020 at 9:11 am GMT

Anthony Charalambous, XM Investment Research Desk

WTI oil futures appear to be positively skewed but are now consolidating ever so slightly below the 49.00 mark, after recently peaking within a heavy resistance section of 48.80-49.61. The Ichimoku lines are conveying a positive tone, despite a minor easing in the incline of the red Tenkan-sen line. Furthermore, the bullish bias seems to be receiving further aid from the rising simple moving averages (SMAs).

On that note, the short-term oscillators are demonstrating a pause in positive sentiment. The MACD, some distance above zero, has slid below its red trigger line, while the RSI is drifting in bullish territory. Backing improvements in price is the positive bearing in the stochastic oscillator.

If buying interest intensifies, the bulls face immediate resistance from the curbing zone of 48.80-49.61. Conquering this key border, the price may then target the 51.14 boundary. Should buyers press above this too, next upside limitations may arise at the critical peak of 54.62, where significant losses occurred back in February.

However, if price remains capped by the 48.80-49.61 resistance, a dip below the red Tenkan-sen line at 47.80 may find early support at the 46.15 trough. A deeper pull back in price may then encounter tough support from the 42.65-43.91 region, which encapsulates the 50-day SMA, and is reinforced by the 100-day SMA underneath at 42.21.

Summarizing, oil in the short-to-medium-term picture remains bullish above the SMAs and the 46.15 trough.

oil

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