WTI Crude Oil: Double Engulf + H&S Breakdown Points to $40Hello guys! Let's dive into WTI!
The weekly chart of WTI Crude Oil reveals a bearish Head & Shoulders pattern playing out over a long-term descending channel. Price recently got rejected from the upper trendline, showing weakness despite a short-term bounce.
- Engulfed 1 & 2:
Two major engulfing zones failed to hold as support, turning into strong resistance.
- Bearish Scenario in Play:
After the recent upside move into resistance, price is likely to follow one of two paths:
- Continuation Within the Channel:
Rejection from the upper bound of the descending channel leads to a stair-step decline toward the $47–52 zone.
- Final Rejection from Supply Zone ($83–89):
A larger corrective push could test this area before a full collapse toward the long-term demand zone.
Main Target:
The blue shaded region ($36–47) stands out as a strong long-term demand zone, where buyers may finally step in.
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Invalidation point:
Unless crude oil breaks above the $89 zone with strong volume, all signs point to further downside.
The chart structure favors a slow bleed with temporary bounces, ultimately targeting the $40s.
