WTI Crude: Bearish Case Grows On Inventory
MarketPulse | Oct 15, 2015 01:26PM ET
WTI has continued to trade lower on Thursday as it looks to extend its losing streak to five consecutive sessions. The move today was helped by a larger than expected build in crude inventories that fed into the long standing supply demand story.
Today’s move has pushed WTI through the descending trend line (albeit one only connected by two lows making the break less significant). This break suggests further declines are in store, assuming we see a daily close below the trend line.
As highlighted on Monday, this could bring $42.70-43.20 into consideration. This was a key area of support throughout September.
It’s worth noting that the MACD histogram suggests that the decline may be losing some momentum. If we fail to get a close below the ascending trend line and a reversal signal in price, it may suggest the move is not going to be so straightforward, although there still appears to be a clear bearish bias here. That doesn’t mean that we can’t see a correction though.
In the absence of a reversal setup, it will be interesting to see whether we continue to see downside pressure in WTI as a failure to close below the ascending trend line may just be a delay of the move to the downside, rather than a sign that we could see another push higher.
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