Watch These Key WTI Oil Price Levels As Chart Signals Possible Breakout

West Texas Intermediate (WTI) crude oil jumped more than 2% to an eight-week high on Monday amid expectations of improving demand over the summer travel months and growing concerns that a regional expansion of the Middle East conflict could cause disruption to global oil supplies.

Below, we take a closer look at a key technical pattern forming on the WTI chart and identify important price levels to watch out for in the third quarter.

Symmetrical Triangle Takes Shape

Zooming out to the weekly chart, the commodity’s price has traded within a symmetrical triangle since September last year to establish easily identifiable support and resistance areas. The pattern, which consists of two converging trend lines connecting a series of sequential peaks and troughs, represents equilibrium between the bulls and bears, but is often followed by a significant move in the direction of the breakout.

In this case, WTI appears poised to break out to the upside as the 50-week moving average (MA) sits above to 200-week MA and the price trades in close proximity to the symmetrical triangle’s upper trendline. However, given the commodity’s volatility, investors should also be prepared for a breakdown from the pattern.

Monitor These Key WTI Chart Levels

If the price breaks above the pattern, investors should keep an eye on two key levels. Firstly, an initial move above the symmetrical triangle could see WTI test a horizontal line linking several price points between October 2022 and September last year around $93.

A close above this region could act as a catalyst for a retest of the closely watched $120 level, an area on the chart where the commodity’s price would likely find sellers near a double top minted in the first half of 2022.

On a breakdown from the pattern, there are also two important levels to watch. Buyers would likely defend a key horizontal line around $60 that connects a series of prices between July 2019 and April 2021.

Finally, a failure to hold the above level could see a steeper decline to a pandemic-era peak near $43, an area that sits nearly 50% below the commodity’s current price.

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As of the date this article was written, the author does not own any of the above securities.