Oil: WTI completes a reversal pattern – RBC CM

Research Team at RBC Capital Markets, suggests that in the case of WTI, the probability of a major low being in place has increased dramatically after the completion of an inverted head and shoulders pattern above the 43 area on April 20.

Key Quotes

“We also note that the Ichomiku cloud has been guiding prices higher after a bullish breakout in March, with prices subsequently surmounting the 200-day moving average at 46.84.

The uptrend in place currently features resistance at 52.06, followed by the channel top at 53.25. Above there, longer-term resistance levels at 55.15 and 58.47 will come into play.

As the RSI moves to its most overbought readings since March, the prospect of a corrective pullback is beginning to increase.

However, short-term corrections to support at 49.24 and 47.39 are viewed as a buying opportunity based on recent developments. A daily close below the channel base at 45.98 will be required to call our bullish outlook into question.”