- WTI oil’s overnight recovery rally from $20.57 seems to have ended with rejection at $24.
- Technical indicators are reporting oversold conditions, but the price chart is showing no signs of seller exhaustion.
WTI is again feeling the pull of gravity, having failed to take out the psychological hurdle at $24.00 in early Asia.
A barrel of black gold is currently trading at $22.64 Prices are down 1.26% on the day and a staggering 50% on a month-to-date basis.
The 14-day relative strength index (RSI) continues to report oversold conditions with a below-30 print, but so far, a notable corrective bounce has remained elusive, which isn’t surprising as investors are worried the ongoing price war between Saudi Arabia and non-OPEC leader Russia will leave the market in an oversupplied state.
The demand side is increasingly looking weak with the coronavirus outbreak threatening to push the global economy into a recession for a prolonged period of time.
The oversold reading on the RSI would gain credence if and when signs of bear fatigue emerge on the price chart in the form of a bullish engulfing candle, Doji candle, etc.
Also, during a strong bearish trend, the RSI can stay oversold longer than bargain hunters can stay solvent.
Daily chart
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Trend: Bearish
Technical levels
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