WTI selloff stalls around cluster of big levels

WTI crude has seen a 11% correction from its January high, and 11 of the past 13 days since the high have been down days. But there is a glimmer of hope for bulls as prices are holding above several key levels of support, just above the $70 handle.

Tuesday's bullish pinbar held above respected the 200-day EMA and 50% retracement levels, while respecting the 200 and 50-day EMAs. It also saw a minor (and ultimately false) break of the $71 handle and November high.

While Wednesday was a down day, it was also an inside day. And this suggests a hesitancy to break immediately lower with demand around $71.

This may be on the scrappy side, but bulls could consider longs around the current lows and seek a rebound to either Wednesday's high, just beneath the $73. Though a higher target could be considered should a fundamentally bullish catalyst arrive.

The bias remains bullish above $70, but $70.49 could also be used to improve the reward-to-risk ratio.


Matt Simpson, Market Analyst at City Index