- Oil prices are likely to tumble further on bearish pennant formation.
- Bears have defended the 20-EMA at $97.35 firmly.
- The RSI (14) is eyeing a drop below 40.00 for the first time in CY2022.
West Texas Intermediate (WTI), futures on NYMEX, has defended reversion to intraday low at $92.79 but is likely to remain sideways as investors are awaiting the outcome of the OPEC meeting on the fresh addition of oil to the global supply. On a broader note, the oil prices are oscillating in a $9 wide range.
On a daily scale, the oil prices are auctioning in a Bearish Pennant chart pattern. The above-mentioned chart pattern displays an inventory distribution, which is followed by a sheer downside. Usually, the inventory distribution phase supports investors to initiate shorts with low risk-reward opportunities. Also, an earlier establishment of a bearish bias bolsters the odds of a forward decline.
The black gold has faced selling pressure while attempting to cross the 20-period Exponential Moving Average (EMA) at $97.35. Also, the 50-EMA at $101.52 is trading higher, which signals that the short-term trend is bearish.
Meanwhile, the Relative Strength Index (RSI) (14) is on the verge of falling into the bearish range of 20.00-40.00 for the first time in CY2022.
Should the asset drops below Monday’s low at $91.72, bears will drag the oil prices towards July 14 low at $88.34, followed by the 10 October 2021 high at $85.00.
Alternatively, bulls could defend the escalating downside odds and may drive the black gold towards April 21 high at $105.24 and June 2 low at $109.96 after surpassing Friday’s high at $100.95 confidently.
WTI daily chart