WTI Price Analysis: Bullish Flag near supply zone advocates more upside

• Oil prices are forming a bullish flag that may trigger a break above the $94.16-94.32 zone.
• Advancing 20-and 50-period EMAs indicates more upside ahead.
• The upward-sloping trendline placed from $90.09 will act as major support for the counter.

West Texas Intermediate (WTI), futures on NYMEX, has turned sideways after failing to cross the critical hurdle of $94.00. The black gold is oscillating in a narrow range of 93.31-93.64 in the Asian session but is likely to display volatile moves ahead.

On an hourly scale, the asset is auctioning in an inventory adjustment phase near the supply zone, which is placed in a narrow range of 94.16-94.32. The formation of a Bullish Flag that leads to a sheer upside after the conclusion of an inventory adjustment is favoring bulls. Also, the upward-sloping trendline placed from the August 16 high at $90.09 will act as major support for the counter.

Advancing 20-and 50-period Exponential Moving Averages (EMAs) at $92.80 and $91.50 respectively adds to the upside filters.

Also, the Relative Strength Index (RSI) (14) is oscillating in the bullish range of 60.00-80.00, which indicates more upside ahead.

A decisive break above the supply zone placed in a $94.16-94.32 range will drive the oil prices towards the August 3 high near $96.00, followed by the psychological resistance at $100.00.

On the flip side, the bears could regain control if the asset drops below Monday’s high at $91.00, which will drag the asset towards Friday’s low at $87.91. A slippage below the latter will expose the asset to more downside towards the August 15 low at $86.34.

WTI hourly chart