Technical analysis update: WTI oil (8th February 2022)
Recently, WTI oil reached a new high of 93.14 USD per barrel. Simultaneously, all our price targets were reached. Because of that we decided to update our thoughts on USOIL today. We continue to maintain a bullish stance in the medium-term and long-term. However, in the short-term we foresee headwinds for oil due to many technical indicators pointing to an overbought condition. We expect the price of USOIL to drift lower towards Support 2 at 85.39 USD. Because of that we would like to set a short-term price target for USOIL to 87.50 USD per barrel.
Technical analysis - daily time frame
RSI is bearish as it performed crossover below 70 points. MACD is flattening which suggests that the bullish momentum is decreasing. Stochastic remains in the bullish area, however, it already points to the downside which is bearish. DM+ and DM- show bullish conditions in the market. However, ADX suggests that these conditions are near its peak. Additionally, the price deviated too far from its simple moving averages. Overall, the daily time frame suggests that the price of USOIL is ripe for correction.
Technical analysis - weekly time frame
RSI shows divergence with price. Additionally, it performed a crossover below 70 points, similarly like on the daily time frame. These developments are bearish. MACD and Stochastic remain bullish. DM+ and DM- are also bullish. Overall, the weekly time frame is mixed.
Illustration 1.01
Illustration above shows the weekly chart of USOIL and its RSI. Divergence between the price and RSI is observable. This phenomenon is bearish.
Support and resistance
Major resistance lies at the recent high of 93.14 USD. Major support sits at 61.76 USD. Support 1 can be found at 87.90 USD and Support 2 at 85.39 USD. Another psychological support below that is at 85 USD.
Please feel free to express your own ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Your own due diligence is highly advised before entering trade.
Technical analysis - daily time frame
RSI is bearish as it performed crossover below 70 points. MACD is flattening which suggests that the bullish momentum is decreasing. Stochastic remains in the bullish area, however, it already points to the downside which is bearish. DM+ and DM- show bullish conditions in the market. However, ADX suggests that these conditions are near its peak. Additionally, the price deviated too far from its simple moving averages. Overall, the daily time frame suggests that the price of USOIL is ripe for correction.
Technical analysis - weekly time frame
RSI shows divergence with price. Additionally, it performed a crossover below 70 points, similarly like on the daily time frame. These developments are bearish. MACD and Stochastic remain bullish. DM+ and DM- are also bullish. Overall, the weekly time frame is mixed.
Illustration 1.01
Support and resistance
Major resistance lies at the recent high of 93.14 USD. Major support sits at 61.76 USD. Support 1 can be found at 87.90 USD and Support 2 at 85.39 USD. Another psychological support below that is at 85 USD.
Please feel free to express your own ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Your own due diligence is highly advised before entering trade.
Trade closed manually:
USOIL overtook its recent high which forces us to abandon our short-term price target.
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