WTI Price Analysis: Bears seek a break of $79.00 to open the flood gates

• WTI bears will be nervous to hold on to positions ahead of US CPI if bulls move in between now and then.
• Bears otherwise seek a break of $79.00 that opens the risk of a move towards Day 1 longs near $76.50.

West Texas Intermediate, WTI, crude oil rallied on Monday, climbing from early weakness to be sold off in New York at the highs of the day into demand again. The follow-through took the black gold to fresh cycle highs for another sell-off later in the day for a lower close.

However, we have length still in the market that is vulnerable to another sell-off as the bears chip away at the trendline as illustrated below. For the opening sessions, Asia and London, there are prospects of a move into the shorts from up high and that could result in a thesis for a bearish head and shoulders pattern:

WTI H1 chart

At this juncture, traders will be watchful of jumping the gun and breaks of structure near $79.00 could be met with demand again from the bulls. After all, critical data is scheduled for the day ahead with the US Consumer Price Index and investors could well be sitting on the sidelines ahead of the data. 

Bears will be nervous to hold on to positions that could be squeezed by the bulls ahead of the data ultimately fuelling an exodus of shorts. However, if there is no resistance from the bulls, a break of $79.00 opens risk of a move towards Day 1 longs near $76.50 in a downside continuation of Monday's bearish close: