In today’s technical analysis, let’s take a closer look at WTI Oil, which appears to be attempting a rebound after weeks of heavy selling pressure. The recovery attempt is not happening randomly — it’s taking place precisely in the key demand zone around the lows from April and May, an area that has historically attracted strong buying interest. Every time the price approached this zone earlier in the year, we saw a noticeable reaction from buyers, and this time seems to be no different.
The shape of this reversal is particularly interesting. On the chart, we can clearly identify an inverse head and shoulders pattern, marked with orange color, which is a classic bullish reversal formation. What’s even more encouraging for the buyers is that the neckline, highlighted in yellow, has already been broken to the upside. This breakout suggests that the market may be entering the early stages of a reversal, with the potential for a short- to medium-term recovery. However, it’s important to remember that this is still a counter-trend move, as the broader structure on oil remains bearish. That means traders should stay cautious — the probability of success is lower compared to trading with the main trend.
For additional confirmation, traders should watch the blue dynamic downtrend line closely. This line has been acting as major resistance throughout the recent correction. A daily close above this blue line would serve as a strong technical confirmation of the bullish reversal and would likely trigger a proper buy signal. Until then, the situation remains cautiously optimistic, with early signs of strength but not yet a full confirmation. As long as oil stays above the recent lows, sentiment is improving, and buyers might finally be ready to stage a comeback.