WTI crude oil picks up bids to pare weekly losses around the lowest levels in 2022 as bulls poke the $72.00 level during Friday’s Asian session. In doing so, the black gold prints the first daily gains in six while justifying a bullish divergence between the oil prices and the Relative Strength Index (RSI) line, placed at 14. That said, the lower low of WTI contrasts with the higher low of the RSI line and teases the commodity buyers around the multi-day low.

However, the recovery moves need validation from the late November swing lows, around $73.70, to convince oil buyers. Even so, a three-week-old horizontal region could challenge the quote’s further upside between $75.25 and $75.75. Additionally, acting as an upside filter is the 200-HMA level surrounding $77.90 and the $78.00 threshold.

In a case where the energy benchmark rises past $78.00, the $80.00 could act as the last defense of bears. Alternatively, a downward-sloping support line from late November, close to $70.80, acts as the immediate challenge for the WTI bears. Following that, the $70.00 round figure and late December 2021 low near $66.00 could lure the commodity sellers.

The four-day bearish streak could see a continuation, as the RSI and the stochastics have yet to confirm oversold conditions. Adding to the discouraging signals is the MACD, which has resumed its negative momentum below its red signal line.

If the bullish scenario unfolds, the price may face initial limitations near the 76.00 level before heading for the 20-day SMA, currently around 79.60. A decisive close above the 38.2% Fibonacci of 83.20 could strengthen bullish engagement up to 88.60, unless the 85.50 barrier blocks the way higher.

In brief, the depreciation in WTI oil futures seems to have some room to go. The next pivot point could occur near 68.55.

Bulls Monitoring Price Action for Corrective Gains

Dec 10 2022

Stop Loss -6.92%

Holding time 93d17hr

71.978

Entry price

66.997

Stop loss price