WTI oil futures (May delivery) collapsed to a 21-year low of 14.46 early on Monday, re-activating this year’s bearish direction and eliminating any hopes of a trend reversal that the incomplete head and shoulder and a double bottom patterns created in previous sessions.
On the four-hour chart, the RSI returned below its 30 oversold level and the MACD strengthened its negative momentum below the signal line, both hinting that the bears may keep pressuring in the short-term.
In this case, the 13.00 level could be the nearest support to keep in mind, a break of which may drive the price towards a tougher obstacle seen between the 11.00 and 10.00 borders.
Otherwise, in the event of an upside correction, traders may look at the red Tenkan-sen line at 17.32 that acted as a strong resistance recently. Slightly higher, the 19.20 barrier may grab attention too, though only a rally above 20.50 could raise buying interest in the market. Next, the 23.20 and 25.15 numbers may take control before the 200-period SMA comes under the spotlight.
Summarizing, WTI futures are expected to weaken further in the short-term, with the 13.00 level likely providing immediate support. For the market to regain buying confidence, the price needs to close decisively above 20.50.
