USOIL - WTI oil peaked and now it is headed lower

14 thg 4, 2022

For the past year, we were predominantly bullish on USOIL. However, this came to a change recently, and we turned neutral to bearish on USOIL. That is due to Strategic Petroleum Reserves being released in vast quantities, production hike talks, and the eventual need to lower energy prices. Therefore, despite the general bullish narrative, we make a contrarian case for the lower cost of oil. Indeed, we would like to set a long-term price for USOIL to 90 USD per barrel.

Illustration 1.01

The picture above shows USOIL on the daily time frame. It also shows the resistance at a slope (white line) and the bullish breakout above it (indicated by the yellow arrow). We will look for a potential breakdown in price and invalidation of the bullish breakout.

Technical analysis - daily time frame
RSI and MACD are neutral. However, MACD needs to be observed for potential bullish crossover above 0 points in the following days. Stochastic oscillates in the bearish area, although it points to the upside. DM+ and DM- show bearish conditions in the market. ADX indicates the trend is weak. Overall, the daily time frame is neutral.

Technical analysis - weekly time frame
RSI continues to develop a bearish structure. However, for the past three weeks, RSI started to flatten, making it neutral. MACD also started to flatten, making it neutral too. DM+ and DM- are bullish. ADX seems to have peaked; indeed, ADX started to decline, which suggests that the bullish trend of a higher degree is weakening.

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.