Although WTI crude prices have plummeted recent upswings especially in European trading sessions, after rejecting below stiff resistance level at 51.22, we uphold our gutsy but momentary bullish stances.
Bulls have managed to break-out stiff resistances of 50.78 and 51.22, the sustenance above the latter would likely drag the rallies, please also be noted that the uptrend in tandem with both leading & lagging oscillators.
We’ve seen the supply sentiments today only after the sharp spikes in last 3 days in a row and the overbought pressures have been hampered upswings.
On the contrary, the buying sentiments are not coupled by both leading oscillators. The current prices are still attempting slide below 21EMA despite the ongoing rallies.
Is it puzzling..? Well, on a broader perspective, one can easily make out that the consolidation phase in the major trend drifts in the symmetric triangle pattern, tests resistance at the downward trend line, consequently, the current prices slide below EMAs.
RSI (on monthly timeframe) signals faded strength in the consolidation phase and overbought pressures by evidencing the downward convergence to the price declines on the monthly chart. While stochastic curves have also been converging downwards but slightly indecisive.
Overall, for the extension of the uptrend, it needs better clarity further.
We uphold our previous recommendation of shorts in WTI crude using mid-month tenors as the underlying price of this energy commodity may slide again upto 50.09 levels (next strong support), or even upto 47.09 levels upon breach below 1st target, maintain a strict stop at $51.74 levels.
Alternatively, capitalizing momentary rallies, it is advisable to initiate Credit Put Spread (CPS) in order to tackle both short-term upswings and major downtrend, the execution can be done by ITM shorts, while, ATM longs.
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