Reversal pattern is forming on daily chart
WTI oil dropped on Tuesday on as fears about negative impact from coronavirus on global demand prevailed, despite some signs that the number of new virus infection cases fall.
Traders remain cautious and awaiting fresh news from OPEC+ group of the biggest oil producers signaled further output cut in order to stabilize oil market.
Negative signals are developing on daily chart as reversal pattern is about to be completed following Monday’s hanging man and today’s long red daily candle.
Also, stochastic reversed in overbought territory and is about to break out, RSI turned south and negative momentum is rising.
Fresh weakness pressures pivotal supports at $51.33/28 (Fibo 38.2% of $49.41/$52.52 corrective leg / 10DMA) close below which would add to existing negative signals.
Traders also focus on US crude stocks reports which are due to be released on Wednesday (API) and Thursday (EIA), delayed one day due to US holiday on Monday and expected to generate fresh signals.
Res: 51.82; 52.52; 53.00; 53.31
Sup: 51.28; 50.97; 50.79; 50.60