On the daily chart, the price is correcting up towards the middle MA of Bollinger Bands. The price remains below its moving averages that are directed down. The RSI is turning down just below its trendline. The indicator has formed a Bearish divergence with the price suggesting a fall in the price. The Composite also turned down. However, MA’s for both indicators suggest some strength of the market.
On the 4-hour chart, the price is trading just below the middle MA of Bollinger Bands while bands make up the range, in which oil has been trading for a week. The RSI turned up after it failed its longer MA. The Composite is also turning up just below its longer MA.
Support levels: 36.88 (local lows), 36.29 (lower MA of Bollinger Bands), 35.93 (December lows).
Resistance levels: 38.09 (upper MA of Bollinger Bands), 37.77 (local highs), 39.30 (EMA130).
Open short positions after the price rebound from the level of 37.77 with the target at 36.95 and stop-loss at 38.02. Validity – 1-2 days.