In today’s technical analysis, let’s take a look at WTI Crude Oil, which recently experienced a very sharp move.
After the decision from Donald Trump to extend the deadline by two weeks, oil dropped almost 20%. That’s a strong reaction and clearly shifts the short-term sentiment.
Now we are seeing a recovery, but it’s important to understand the context. This rebound is happening within a bearish structure, which makes it more of a correction than a trend reversal.
Technically, the situation is quite clean. Earlier, we had a false breakout to the upside from a symmetric triangle, marked with the orange rectangle. This kind of move is often followed by a sharp reversal, and that’s exactly what happened.
After the drop, the price is now coming back to test key resistance. This includes the lower boundary of the triangle and a horizontal resistance marked in green.
If the price gets rejected from this area, meaning we see a clear bounce off resistance and a move lower, that would create a solid opportunity to go short with better entry levels.
So for now, the focus is on this resistance zone. The trend is bearish, and this recovery may simply be setting up the next leg down.