WTI Price Analysis: Hits 3.5-month low, weekly indicator turns bearish for first since October
- WTI oil's weekly MACD, a lagging indicator, has turned bearish for first since October.
- The daily chart indicators are reporting oversold conditions.
WTI oil prices fell to $52.19 in early Asia to print the lowest level since Oct. 10. The black gold is currently trading at $52.90 per barrel, representing a 2.47% drop on the day.
The oil benchmark has dropped by more than 19 percent since topping out at $65.62 on Jan. 8.
The weekly MACD histogram, an indicator used to identify trend strength and trend changes, has crossed below zero for the first time since October, indicating a bearish reversal.
The MACD is based on moving averages and tends to lag prices, especially on longer duration charts. Trades, therefore, can take the latest bearish turn with a pinch of salt – more so, as the 14-day relative strength index is reporting extreme oversold conditions with a below-30 print.
The RSIs on the hourly and 4-hour charts are also echoing similar sentiments. As a result, a corrective bounce to $53.82 (hourly resistance) cannot be ruled out.
A close above the 10-day moving average is needed to invalidate bearish pressures. On the downside, support is seen at $52.43 (Oct. 15 low), under which the Oct. 3 low of $51.03 could be put to test.