Crude Oil Technical Price Outlook: WTI Pullback Testing Pivot Support

Crude oil prices are down nearly 3% since the start of the week and while the risk remains for further losses near-term, the broader picture remains constructive after last month's rebound. These are the updated targets and invalidation levels that matter on the WTI charts this week.

CRUDE OIL DAILY PRICE CHART (WTI)

(Click on image to enlarge)

Crude Oil Price Chart - Daily WTI

Technical Outlook: In my latest Crude Oil Weekly Technical Outlook, we warned that the recent, “price advance remains vulnerable near-term while below 55.21/53.” WTI registered a high at 54.30 before reversing last week with the decline now testing the 100% extension (two-equal legs) of the decline off the monthly high at 51.45. Note that the advance off the December low does look to be a five-wave affair and as such, a three-wave correction would bode well for the bulls. It’s make-or-break here near-term.

CRUDE OIL 120MIN PRICE CHART (WTI)

(Click on image to enlarge)

Crude Oil Price Chart - 120min WTI

Notes: A closer look at price action shows oil breaking below a near-term price consolidation just below resistance at 53.80 (2017 yearly open) with the decline now testing confluence support at 51.45. A break below this threshold would suggest a larger correction is underway with such a scenario exposing subsequent objectives at 49.73 and pitchfork support / 50% retracement at 48.32(bullish invalidation)– both areas of interest for possible price exhaustion IF reached. Look for initial resistance at the high-day close at 52.97 with a breach above 53.80 needed to shift the focus back towards the topside targeting 55.00/53.

Bottom line: Crude has turned from confluence resistance and a break below 51.45 would keep the focus on a larger correction towards near-term slope support. Ultimately, a larger pullback in price may offer more favorable long-entries lower down with the broader outlook weighted to the topside while above 48.32.

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