West Texas Intermediate may rebound after reaching a technical-support level within a “triangle” on the weekly chart, according to Societe Generale SA.
WTI, which lost 9.5 percent over the past three weeks in New York trading, will probably recover as futures stay within the triangle pattern going back to September, said Stephanie Aymes, a London-based technical analyst at France’s fourth-largest bank. The formation has a lower and upper boundary of about $86 and $98 a barrel this week.
“WTI has been evolving within a large triangle consolidation,” Aymes said in a report dated April 19. “It just hit the long-term rising trend line at $86 to $86.20, which also coincides with the corrective channel support. A rebound is to be expected.”
Crude for June delivery on the New York Mercantile Exchange slid to as low as $85.90 a barrel last week before settling higher, signaling a rebound from technical support. Futures declined as U.S. fuel demand shrank and the International Monetary Fund downgraded its forecasts for global economic growth this year. The June contract, the most actively traded, was up 42 cents at $88.69 in electronic trading at 11:05 a.m. Singapore time.
WTI may rise as high as $89.40 a barrel and has longer-term resistance at $90.25 to $90.55, according to Societe Generale’s report. Investors typically sell contracts near technical-resistance levels and buy when prices are close to chart support.