WTI Oil Technical: Continuation of potential impulsive up move within a major uptrend

  • The recent minor corrective pull-back of -4.7% from its 19 September 2023 high of US$93.05 is likely to have ended.
  • Bullish reversal candlestick, a daily “Hammer” sighted after a retest on its upward-sloping 20-day moving average.
  • Key short-term support to watch will be at US$90.30, the pull-back of the former minor “pennant” range resistance.

This is a follow-up analysis of our prior report, “WTI Oil Technical: Bullish exhaustion sighted below US$93.80 per barrel key resistance” published on 20 September 2023. Click here for a recap.

West Texas Oil (a proxy of WTI crude oil futures) has indeed shaped the bearish counter-trend pull-back movement of -4.7% from its 19 September 2023 minor swing high of US$93.05/barrel to a low of US$88.66/barrel printed yesterday, 26 September which fell short of the earlier highlighted short-term support zone of US$86.30/US$84.90 as per highlighted in our prior analysis.

Overall, the price actions of West Texas Oil are still evolving within a major uptrend phase which is still intact since its 4 May 2023 low of US$63.67 per barrel.

Key bullish reversal sighted after a retest on the 20-day moving average

Fig 1:  West Texas Oil medium-term& major trends as of 27 Sep 2023 (Source: TradingView, click to enlarge chart)

Interestingly, there was a significant change in sentiment yesterday that led to the formation of a daily bullish reversal “Hammer” candlestick pattern right after a retest on the upward-sloping 20-day moving average that is acting as a support at around US$88.90/barrel.

These positive technical elements where price actions have staged an intraday reversal from yesterday, 26 September intraday low of US$88.66/barrel and closed near the upper end of its intraday range suggests a potential start of another medium-term impulsive up move sequence within its major uptrend phase.

Bullish breakout from minor “pennant” range configuration

Fig 2:  West Texas Oil minor short-term trend as of 27 Sep 2023 (Source: TradingView, click to enlarge chart)

Yesterday’s price actions of West Texas Oil have also staged a bullish breakout from a 5-day minor “pennant” range configuration which indicates a potential continuation of its prior short-term bullish movement above the 20-day moving average.

Watch the US$90.30 key short-term pivotal support for a potential push up towards US$93.80 and a clearance above it sees the next intermediate resistance coming in at US$95.80.

On the other hand, failure to hold at the US$90.30 key support invalidates the minor bullish breakout scenario for another round of corrective pull-back to expose the next intermediate support zone of US$88.90/US$88.06.

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Kelvin Wong

Kelvin Wong

Senior Market Analyst, Asia Pacific at OANDA
Based in Singapore, Kelvin Wong is a well-established senior global macro strategist with over 15 years of experience trading and providing market research on foreign exchange, stock markets, and commodities. Passionate about connecting the dots in the financial markets and sharing perspectives around trading and investment, Kelvin Wong is an expert in using a unique combination of fundamental and technical analyses, specializing in Elliott Wave and fund flow positioning, to pinpoint key reversal levels in the financial markets. In addition, over the last ten years, Kelvin has conducted numerous market outlook and trading-related seminars, as well as technical analysis training courses, for thousands of retail traders.