WTI Oil Technical: Potential bullish reversal “Descending Wedge” in play - MarketPulse

WTI Oil Technical: Potential bullish reversal “Descending Wedge” in play – MarketPulse

Time Stamp: July 21, 2023 3:49 AM
Source Node: 2780072

  • Major downtrend phase from the 7 March 2022 swing high has evolved into a potential bullish reversal “Descending Wedge” configuration.
  • US$77.30 is the key intermediate resistance (200-day moving average & upper boundary of “Descending Wedge”).
  • Key short-term support rests at US$72.20, also the 50-day moving average.

Since its 7 Nov 2020 medium-term swing high of US$94.11 per barrel, the price actions of West Texas Oil (a proxy of WTI crude oil futures) have been oscillating within an 8-month bullish “Descending Wedge” configuration which suggests a potential major bullish reversal configuration in the process since its major downtrend phase from 7 March 2022 high of US$131.30 to 4 May 2023 low of US$63.67 that recorded a loss of -51.5%.

Major downtrend phase has evolved into a potential bullish reversal “Descending Wedge”

Fig 1:  West Texas Oil major & medium-term trends as of 21 Jul 2023 (Source: TradingView, click to enlarge chart)

Oscillating within a short-term uptrend phase since 28 June 2023 low of US$66.95

Fig 2:  West Texas Oil minor short-term trend as of 21 Jul 2023 (Source: TradingView, click to enlarge chart)

Since its recent 28 June 2023 low of US$66.95, its price actions have started to evolve into a minor short-term uptrend phase and cleared above the 50-day moving average that is now turning upwards.

In addition, both the daily and hourly RSI oscillators are exhibiting positive configurations and readings which indicates that medium-term and short-term upside momentum remains intact.

A clearance above US$77.30 key intermediate resistance (the 200-day moving average & the upper boundary of the medium-term “Descending Wedge”) may see a bullish breakout towards the next resistance at US$80.20/80.70 (the upper boundary of the minor ascending channel from 28 June 2023 low & a Fibonacci extension cluster) (see 1-hour chart).

However, failure to hold above US$72.20 key short-term pivotal support (also the 50-day moving average) negates the bullish tone to expose the key medium-term support at US$67.00/65.65.

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Kelvin Wong

Based in Singapore, Kelvin Wong is a well-established senior global macro strategist with over 15 years of experience trading and providing market research on foreign exchange, stock markets, and commodities. Passionate about connecting the dots in the financial markets and sharing perspectives around trading and investment, Kelvin Wong is an expert in using a unique combination of fundamental and technical analyses, specializing in Elliott Wave and fund flow positioning, to pinpoint key reversal levels in the financial markets. In addition, over the last ten years, Kelvin has conducted numerous market outlook and trading-related seminars, as well as technical analysis training courses, for thousands of retail traders.
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