Crude oil rebounded sharply yesterday as risk appetite was generally positive during US session which saw stocks benefiting from the strongest day in 2 weeks. However, the rally was short, prices quickly dropped below 103.0 support level. It is not really the fault of WTI, the major risk trends were retracing much of their earlier gains during New York afternoon as well and it is natural that the WTI which have been raised by the risk trends previously followed the decline.
This being said, there are still signs of weakness for WTI Crude - the gathering of just erase the last swing high seen on February 20 while the stocks have managed to break the ceiling last week and especially managed to keep prices above the previous resistance unlike crude oil is trading below the floor of the last transaction Thursday / Friday. In addition, while stocks ignored the bearish economic data that was released at the beginning of the US session, it can not be said about WTI where prices are not a smooth upward trajectory unlike stocks. Certainly, traders may argue that the reason for the less simple WTI rally yesterday can be attributed to the fact that 103.0 resistance provided much more difficult for prices to move higher, but this does not change the label we are giving bearish WTI as will trade below 103.0 once again - and any gathering potential going forward will probably face significant resistance again
timetable
is not catastrophic for many bulls. The price is currently approaching the rising trend line which should provide support. Even if the trend line is broken, we should still be able to see significant support 102.5 stretching round figure until last Friday low swing. Since the stochastic readings are currently in the oversold region, the probability of a collapse in prices by less and has the broad risk appetite starting to come again, we should be able to see WTI climbing or at least remain flat in future.
Daily chart
daily chart does not give us new knowledge is that we remain close to the level of 103.0. bullish momentum remains intact, even if the probability of a high price in place is possible and perhaps even more likely since a short-term correction scenario is opened with the outside channel rebound Bottom Top Search Channel . However, with prices sticking near 103.0 for the last 4 trading days, it is difficult to draw conclusions about the directionality.
Basically, we must be aware that the risk of declining overall trend of risk also increases. So far we have not seen significant declines in stocks after a prolonged rally in 2013. In addition, analysts were expecting stock prices to fall in February, but the price has actually gained strongly despite absence of positive economic news release major in February that can justify the gathering. As such, it is reasonable to say that the market was too optimistic in its entirety, and risk appetite should disintegrate, crude oil is showing relative weakness is likely to suffer even more
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