West Texas Intermediate crude will probably advance to about $94 a barrel even after prices formed a bearish hanging man pattern last week, according to technical analysis by Futurestechs.com Ltd.
The crude for February delivery may move higher after testing its short-term resistance on Jan. 2, Liam Roberts, a technical analyst at the Billericay, England-based researcher, said by phone today. WTI fell 49 cents, or 0.5 percent, to $92.60 a barrel as of 11:34 a.m. today in electronic trading on the New York Mercantile Exchange.
“We’re content backing the bulls,” Roberts said. “There’s some selling, but there’s still room to move higher.”
A so-called hanging man pattern occurs on a candlestick price chart when a security opens and closes near the same level after falling during an intraday selloff. WTI was in this formation on Jan. 4.
The pattern suggests “the bulls don’t have it all their own way, although they do still remain in control,” Roberts said in a note today.
WTI’s immediate price target is from $93.95 to $94.17 a barrel, while support is at $91.85, he said. If the grade rises above its short-term resistance, it may then rally to $100.
Gains are also backed by an uptrend channel established at the beginning of the year, he said.
Money managers boosted bullish, or net-long positions for Nymex WTI futures and options combined by 11 percent in the seven days ended Jan. 1 to the most since Oct. 16, the Commodity Futures Trading Commission said Jan. 4 in its weekly Commitments of Traders report.