WTI Price Analysis: Braces for volatility contraction on Symmetrical Triangle formation

• A breakout of the Symmetrical Triangle will be followed by volatility expansion with volumes and wider ticks.
• The RSI (14) is oscillating in a 40.00-60.00 range, which signals a consolidation ahead.
• Advancing 50- and 200 EMAs add to the upside filters.

West Texas Intermediate (WTI), futures on NYMEX, is facing barricades near the round-level resistance of $110.00. On a broader note, the oil prices are trading in a wider range of $107.93-110.95 this week. A $3 range move this week is indicating a volatility squeeze in the counter.

On a four-hour scale, oil prices are auctioning in a two-month-long Symmetrical Triangle whose ascending trendline is placed from April 11 low at $92.65 while the downward sloping trendline is plotted from March 24 high at $115.87. Usually, a symmetrical triangle formation denotes volatility contraction, which results in its expansion, displayed by rising volume and wider ticks.

The 50- and 200-period Exponential Moving Averages (EMAs) at $108.92 and $105.58 respectively are scaling higher, which adds to the upside filters.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00 range, which signals a consolidation ahead.

A sheer upside move above May 17 high at $113.18 will bolster the oil bulls and may drive the asset towards March 24 high at $115.87, followed by March 7 closing price at $118.43.

Alternatively, bears could gain dominance if the asset drops below Tuesday’s low at $107.89. This may drag the black gold towards May 19 and May 11 low at $102.95 and $98.30 respectively.

WTI four-hour chart