WTI Breaks Below 200-Day Average; Sellers Target $73.43

WTI crude oil fell to $75.59 on Tuesday, a new low for the current pullback, after prices broke below the 200-day moving average near $77.02. The session looked likely to close under that average, a confirmation that sellers are in control of the shorter-term trend, technical analyst Bruce, a CMT charter holder, said.

The moving-average break triggered a small bearish flag pattern, a setup that typically projects a continuation of the decline. Resistance from the 20-day and 50-day moving averages near $81.60 has now held for a second day; Tuesday's high of $82.76 marks the first overhead level.

Below the 200-day line, the slide has already cleared the 61.8% Fibonacci retracement of the prior advance at $77.90, a level measured from the prior rally. Bruce now points to the 78.6% retracement at $73.43 as the next target, and just beneath it sits the 100% projected objective of a falling ABCD pattern at $71.32, a measured-move target that completes the structure. That level converges with an uptrend line drawn from the prior swing low. The band from $71.32 to $73.43 is the first meaningful support, he said.

The larger structure is a symmetrical triangle, a consolidation pattern where the range contracts over time. The apex sits near Nov. 10, and the pattern resolves before that date. Until then, swings are expected to shrink. Outside the pattern, structural support sits at the swing low of $67.73, with resistance at the swing high of $94.34.

Elsewhere in energy, front-month natural gas is holding support against heavy short positioning.

The medium-term bias stays bullish once the triangle completes, Bruce said. WTI broke out of a long-term bearish correction earlier this year. After that breakout it printed a high of $119.54, a level the market may test again on an upside resolution of the pattern.