The West Texas Intermediate (WTI) crude oil futures appear to be entering the late stages of a consolidation phase that could transition into a rally very soon. This is the benchmark crude oil contract for the US market, which has been trailing Brent futures in price but tends to move in the same overall direction. Autochartist has identified the sideways movement in the WTI futures as a triangle chart pattern, in this case a continuation pattern implying an eventual upside breakout and resumption of the bullish trend.
The triangle chart pattern has been a consistent indicator of price action since the initial breakout above $100 per barrel took the market to a new trading range between $104 and $110 per barrel. The pattern scores 8 bars in overall quality, with the 10-bar reading in the initial trend category encourage the upside bias for a breakout. As the apex of the triangle approaches, the time left for a breakout diminishes.
Tuesday's settlement price coincides with the trend line resistance near $107 per barrel. A turn higher from here would trigger a buy signal and upside forecast on the Autochartist completed patterns platform. A reversal may push the price back to the triangle support near $105.75 a barrel, with a move below that triggering a reversal and subsequent breakout signal to the downside. For further information on this and other Autochartist products, visit our website at www.autochartist.com