Potential Downtrend for WTI Oil
16 July 2024
Oil is at a critical juncture right now, specifically WTI oil. The price is forming a head and shoulders pattern, indicated in yellow, and is currently battling at the neckline, marked in black, which coincides with a significant horizontal support, marked in green. This support has previously served as both resistance and support multiple times, underscoring its importance. Additionally, this head and shoulders formation is bouncing off the upper line of a symmetric triangle pattern, marked in orange.
Interestingly, this is not the first head and shoulders pattern we have observed. Earlier in 2024, a similar formation, marked in blue, resulted in a significant downswing. This historical precedent suggests that we could see a similar bearish move if the current pattern holds. For a confirmed sell signal, we need to see the price close below the green support area and the black neckline today.
Currently, the market is in a state of flux, with traders closely watching these levels. If the price fails to break below the critical support, we may see a bounce. However, a decisive close below these levels will likely trigger a strong sell signal, leading to a potential downswing in oil prices.