WTI crude oil futures rebounded on the multi-year low of 19.25 on Monday, struggling beneath the 20- and 40-period simple moving averages (SMAs) and the Ichimoku cloud in the 4-hour chart. However, the RSI is pointing upwards in the negative territory, approaching the 50 level, while the stochastic is flirting with the overbought zone.
Immediate resistance, in case of some gains above the near-term trend line, could come from the 20- and 40-period SMAs currently at 21.76 and 22.88 respectively. More upside pressure could drive the market inside the Ichimoku cloud, and towards the 25.14 barrier taken from the latest highs. More increases could test the 23.6% Fibonacci retracement level of the downward move from 54.70 to 19.25 at 27.63, while slightly above it could halt at the 28.45 resistance.
On the other hand, additional declines may send oil lower again, finding support at the multi-year trough of 19.25. More losses could extend the bearish outlook towards the 19.00 round number.
Summarizing, the market has maintained sharp bearish sentiment since January, but in the very short-term, the momentum indicators are signaling a bullish correction