WTI crude oil has opened strong today, up over 50 cents on the session. After a sell-off that has produced more than a $5 loss in value, bullish sentiment is finally creeping back into the market. As of now, it appears that the psychological level of $60.00 is going to be the catalyst for participation moving forward.

The recent weakness in oil has come as a surprise to many. North American fracking operations have begun to come back online, hoping to bolster production during the Spring and Summer months. However, widespread optimism about the prospects of $75 crude has faded and price is struggling to stay north of $60.00.

WTI Crude Oil Technicals

The daily chart for March WTI crude oil futures gives us a clear view of the magnitude of the recent bearish trend.

Price has rejected downside support and is currently rotating between $59.50 and $60.50. The bearish bias remains technically valid, as a retracement of over 38% has not yet been established.

As we move further into the trading week, there are three levels to keep an eye on:

• Resistance(1): 38% Retracement of Current Bear Run, $61.36
• Support(1): 78% Retracement Dec. Low/Jan. High, $58.29
• Catalyst For Participation: Psyche Level, $60.00

Overview: WTI crude is trading with huge volumes, exhibiting heavy two-way action in the vicinity of $60.00. I will be looking for this market to consolidate between $60.00 and $58.29 for the near future.

In the event that we see a concerted rally, a short trade setup from the 38% retracement level will come into play. This scenario is a likely result of the coming oil inventory cycle. Be sure to check out the live signals page for trade ideas facing a variety of products, including USOIL.