Crude WTI Oil top-down trading analysis
In this article, we will take a look at the WTI Oil from higher time frames to actionable lower time frames
On the monthly chart, we can see that the instrument is capped by the strong upside long-term resistance 42-48 zone. After the brief break below the long-term uptrend resistance 48, we saw a bounce of 5 and a pullback for a retest of this zone which was also the big gap down breakout. This resistance zone needs to be cleared for the upside continuation.
The weekly chart is indicating the failure to break above 41.30 for 4 weeks. Rejection from here is expected and a continuation lower, while a brief rally to 45 is not excluded, a break below 37 will give us high probability short trade entries.
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On a daily chart, we can see that the instrument is in the terminal wedge. A daily confirmed break below the wedge resistance 36.80 would be enough for an extension lower and a high probability short trade entry. You can go short on a break below 36.80 with the stop loss above 38.50 targeting 30 in the medium-term.
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We have used the combination of the top-down trading analysis to get these key levels explained in the charts.
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