WTI OIL – Hanging Man on weekly chart warns of correction
WTI oil price extended lower on Monday and returned below falling weekly 200SMA ($58.07) which was briefly broken in past two weeks.
Reversal signal is developing on weekly chart after last week’s action ended in weekly Hanging Man candle and closed in red after six straight bullish weeks.
Overbought weekly slow stochastic and RSI turning lower after denting overbought zone border are additional negative signals.
Today’s weakness could extended towards key supports on daily chart at $57.10 (20SMA) and $56.75 (29 Nov low), with sustained break here needed to confirm reversal.
Overall bias remains bullish with positive sentiment being boosted by OPEC’s decision to extend output cut agreement until the end of 2018.
Buying on correction remains favored for final push towards $60.00 target, with extended pullback to risk dip towards next key support at $54.80 14 Nov trough).
Res: 58.31; 58.86; 59.02; 60.00
Sup: 57.41; 57.10; 56.75; 56.41