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A rebound in USOIL might not be done yet

Last week, West Texas Intermediate crude oil reached our price target of $70 and slid as low as $68.83 per barrel. After this route, USOIL has slightly rebounded and currently trades near the $71.50 price tag. In the very short term, we acknowledge a potential for the price to continue higher. Indeed, this would be consistent with a natural occurrence of the price retracing toward its moving average, particularly the 20-day SMA. Yet, if the price breaks above this level and starts to consolidate there for a certain period, it might foreshadow even higher price tags; we will reassess our view if we get there. Beyond this short-term speculation about the prospects of further rise in USOIL, we stay bearish. Accordingly, our price target of $65 per barrel for the next year remains valid.

Illustration 1.01

The image above shows the daily chart of CL1!. Red arrows highlight the decreasing price accompanied by falling volume (suggesting the selling pressure might be decreasing as well).

Illustration 1.02

Illustration 1.02 displays the daily graph of USOIL and simple support/resistance levels derived from particular troughs.

Technical analysis
Daily time frame = Bearish
Weekly time frame = Bearish

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DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor or any other entity. Your own due diligence is highly advised before entering a trade.