WTI Oil Price Analysis: Consolidating within a short-term bullish trend

• WTI oil is in a short-term uptrend within an ascending channel.
• The raw material has retreated and is consolidating; Your next move could be critical.
• A move below the range lows could change the trend to bearish; A rise above the March high would continue the bullish trend.

The price of WTI oil is moving within an ascending channel whose rising highs and lows indicate that the commodity is in a short-term uptrend.

Given the old adage that “the trend is your friend until the bend,” the price is favored to continue rising in the short term until the weight of evidence suggests it has reversed.

WTI Oil 4-Hour Chart

The longer-term trend is less clear, suggesting some caution in taking an overly bullish view.

On March 19, the price of oil reached a high of $83.05 before retreating. A combination of resistance from the 100-week SMA (not shown) and the top of the price channel were likely the catalysts for the rejection.

Since then, the price of oil has fluctuated between $80.20 and $82.00.

Although the WTI price keeps its short-term uptrend intact, it is at risk of reversing lower unless it can make a higher high.

A break below the lows of the $80.20 range would indicate that the highs and lows are now in a descending rather than ascending pattern, and that the short-term trend is bearish. This would begin to push the odds in favor of bearish trades.

Such a move would likely lead to a pullback within the channel to an initial target at $78.60-$78.80, where a combination of major moving averages converges, providing dynamic support for the commodity.

On the other hand, a break above the highs of $83.05 would indicate a continuation of the short-term uptrend, with the next possible target at the top of $83.00, perhaps at $83.90.