WTI crude oil slipped to $80.37 on the 5-hour chart, landing directly on the 200-period simple moving average and the VWAP. The RSI reading is deeply oversold, and traders are watching whether the level holds or breaks toward lower targets.
Crude Oil WTI hit $80.37 on the 5-hour chart, sitting on top of the 200-period simple moving average at $79.59 and the VWAP at $80.60. The confluence marks make-or-break support and resistance territory: a breakdown could open the door to a deeper correction, while oversold conditions leave room for a short squeeze.
Momentum Signals Point Bearish, But RSI Is Oversold
The RSI reads 29.36, a deeply oversold level that hints downside could soon exhaust. However, the MACD sits at -0.89, below its signal line and pointing to strong downward momentum. The SuperTrend indicator remains bearish, with cloud resistance looming at $83.88 and above. A recent distribution top at $87.69 has fully resolved in the bears' favor, and a bearish Marubozu candle hammered the current support zone.
Bull and Bear Scenarios Diverge Around the 200 SMA
Aggressive bears could enter on a break of VWAP at $80.50, targeting $77.36, then $74.93, then $70.00, with a stop at $82.30 and risk/reward up to 5.8:1. Conservative bears wait for a close below $79.40, under the 200 SMA, before chasing the same targets and stop.
On the other side, aggressive bulls could look for an entry near $79.80 at the 38% Fibonacci retracement, targeting $83.50, $84.50, and $87.00 against a $78.00 stop, though the source flags this as a risky knife-catching attempt. Conservative bulls wait for a close above VWAP at $81.50 before targeting the same levels.
A No-Trade Zone Sits Between Support and Resistance
The stretch between $80.00 and $83.50 counts as a chop zone, where fakeouts and whipsaws make trading riskier. A brief dip below $79.50 could also trigger a bear trap, shaking out late shorts before price snaps back toward the range.
Traders are watching two triggers for direction: a close above $81.50 on the 5-hour candle would favor bulls, while a close under $79.40 with expanding volume would favor bears. Price churning between $80 and $81 would leave both setups without confirmation.
Source: Investing.com
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