WTI crude oil futures (for February delivery) rebounded on the 18-month low of 42.50 on December 26, driving the price higher towards a three-week high of 49.80 yesterday. The technical indicators suggest that there are still some investors that could hold the market on the downside; the MACD is consolidating below its red signal line, however, the RSI has turned slightly higher above 50 level.
Should the price retreat, the 20- and the 40-simple moving averages (SMAs) at 47.88 and 46.73 correspondingly could be the next immediate levels to watch. Below that, the area around 44.30, which halted downside pressures several times at the end of the previous month could be another potential barrier.
On the other side, if the oil continues the current upside move it could find nearby resistance at the 49.80. Further up, the price could rest around the 23.6% Fibonacci retracement level of the downleg from 76.90 to 42.50, near 50.65. A decisive close above the latter could push oil prices until the 53.25 barrier.
To summarize, oil futures currently stand in a bullish correction mode in the very short term, while looking at the bigger picture the market continues to hold in bearish tendency.
