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Anticipating Another Bearish Leg in US WTI Crude Oil (USDWTI)

Oil prices have been choppy and slightly bearish in 2017. It is only slightly bearish, because bearish swings have been followed by similar upswings, although the upswings have been slightly shorter. The daily chart shows the lower highs and lower lows during this choppy consolidation.

USDWTI Daily Chart

(click to enlarge)

Another Leg Down?
- As we can see on the daily chart, price has been indeed choppy in 2017. 
- Within this price action, the highs have been obediently holding under a falling trendline.
- August was not different. After price tagged 50, USDWTI stalled just under the trendline resistance and began falling. 
- It has broken below the July-August rising support, opening up further downside. 
Downside:
- If a bearish swing does develop, we can expect price to test the 42.25-42.50 support area. 
- Staying in line with the current choppy bearish mode of 2017, we can also anticipate a break below towards the August 2016 low aroud 39.40, or perhaps around 40. 
Upside:
- At this point, a failure to reach the 43 area and a rally above 50 would signal a change to the consolidation mode of 2017. This would signal a bullish trend, which first opens up the 2016-2017 highs aroudn 55.