WTI oil started week in negative mode after Friday’s report showed increase of numbers of US oil rigs which adds to existing concerns over global growth slowdown and oversupply.
However, the downside attempts were so far limited by rising 30SMA (currently at $51.94), with downside rejections seen last Thu/Fri and today’s bounce from 30SMA) generating initial signal that bears might be running out of steam.
Rising daily momentum supports scenario and may keep the downside protected for some time, but more work at the upside is needed to neutralize existing downside risk.
Break above 20/10 SMA’s ($53.30 and $53.69 respectively) is needed to activate reversal scenario and shift near-term focus higher.
On the other side, last week’s close in red and formation of weekly bearish engulfing weighs, however, fresh bears need clear break below 200WMA ($52.33) to generate stronger bearish signal and expose supports at $50.90 (55SMA) and $50.62 (Fibo 38.2% of $42.36/$55.73 ascend), loss of which would spark stronger weakness.
Res: 52.98, 53.30, 53.69, 54.28
Sup: 51.94, 51.32, 50.90, 50.62