WTI crude oil made a strong bounce as it tested the bottom of the long-term ascending channel. Applying the Fib tool on the latest swing high and low shows the potential upside targets as the climb resumes.

The 38.2% extension is close to the mid-channel area of interest around $72 per barrel while the 50% extension s at $72.72 per barrel. Stronger bullish momentum could take it up to the 61.8% extension just past $74 per barrel or the 78.6% extension at the $76 per barrel mark and top of the channel. The full extension is located at $78.58 per barrel.

The 100 SMA has crossed below the longer-term 200 SMA, though, so the path of least resistance might be to the downside. In other words, there’s still a chance for the selloff to resume and the 100 SMA appears to be holding as dynamic resistance.

RSI is moving up to show that buyers are regaining control and could continue to push crude oil higher until overbought conditions are seen. Stochastic is also on the move up so the commodity price could follow suit, but the oscillator is already nearing overbought levels. Turning back down could bring sellers in and lead to another dip to the bottom.

Crude oil has managed to stay resilient amid larger than expected inventory buildup in the US as reported by the Energy Information Administration and record production from Kuwait. Russia also reportedly increased its production in order to keep a lid on price levels in keeping with its agreement with the OPEC.

However, the bounce may merely be due to technical reasons as traders have been eyeing support at $67 per barrel for the past few weeks. This could be a result of profit-taking that is spurring a short-term pullback from the earlier slide. In any case, the Baker Hughes oil rig counts might be the next catalyst.