Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.
In early April, WTI cleared rising wedge resistance near 61.60.
The market went on to carve two new swing highs above the 63.60 region.
However, like most upward breaks of ascending patterns, it didn’t last.
As of Friday’s close, the last three weeks of movement are nothing more than a false break.
Even the weekly time frame shows a bearish engulfing pattern.
In fact, this past week’s candle engulfed the previous two weeks.
Crude oil is also back below the 64.00 handle which served as key support for the market in June and August of last year.
Any retest of the area between 63.20 and 63.60 next week is likely to attract sellers.
With that in mind, I favor selling WTI for what could be a substantial move lower.
How low, exactly?
It’s difficult to say, but as long as oil is below 63.60 resistance on a daily closing basis, the 60.30 area is exposed followed by 58.20 and 55.40.
And if the market treats this as a rising wedge, it puts the objective at the pattern’s inception point or 42.45.
Buyers would need to secure a daily close back above the 64.50 area to negate the bearish outlook.