WTI crude oil futures continue to rise above the Ichimoku cloud and the 200-period simple moving average (SMA), remaining inside a bullish move over the past five days. According to the RSI, positive momentum could push for further gains in the short-term as the indicator picks up steam above its neutral threshold of 50, while the stochastic oscillator is still gaining ground in the overbought area.
In the positive scenario, where the price continues to expand above today’s high, a new top could be formed around the 41.71 barrier ahead of 42.36. If the market overcomes that area, traders could look for resistance at 43.57-43.77, which includes the five-month high.
A reversal to the downside could stall at the 40-period SMA around 39.24. Further below, the lower surface of the cloud could also provide support at 38.72 and any violation at this point could probably trigger further sell-off in the market, leading the price down to 36.64.
Regarding the medium-term picture, the neutral outlook has built up as oil continues to fluctuate within 36.11 and 41.71.
To sum up, the very short-term bias is bullish though the price could be close to overbought levels, because of the indicators’ signal.
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