FxWirePro: WTI crude hammer counters gravestone in rising channel, major trend on verge of heading towards 50% Fibos with 3Y highs

Chart pattern formed - Bulls in minor trend spike through rising channel, failure upswings at channel resistance with gravestone doji formation on daily plotting, hammer pattern occurred at $63.45 levels that counter the bearish pattern.

While bulls break-out symmetric triangle resistance and the extension of the consolidation phase by retracing more than 38.2% Fibonacci retracements, the uptrend is now on the verge of retracing upto 50% on monthly terms.

In this process of the Bull Run, WTI crude prices have managed to hit 3 years highs (refer monthly chart). Thereby, the bulls in the major trend have shrugged off the bearish indication to extend the bullish channel pattern.

For today, the prices have been drifting in sideways but well above 7DMAs, both leading oscillators have been slightly indecisive but still signaling buying sentiments.

On a broader perspective, let’s have a glance through the major trend that was bearish now has gone into consolidation phase that was jerky way back in mid-2015.  From massive slumps from the peaks of $114 levels shouldn’t be disregarded and jumping to conclude this as a robust uptrend would be unwise, it is just 38.2% retracements.

More rallies on the cards upto next major resistance at $70.18 levels upon bullish EMA crossover (7EMA crosses over 21EMA).

Major supports are observed at $62.54 levels.

While both leading oscillators (RSI & stochastic curves) on monthly terms have been converging upwards that signal strength in the prevailing uptrend.

Hence, we’ve already advocated adding longs using futures contracts of near-month tenors with a view to arresting upside risks, we reiterate that it is wise to use dips to deploy long hedges using these WTI derivative contracts but using mid-month tenors as well.