WTI crude oil could be in for a reversal from its slide, as price is forming a complex double bottom. The neckline has yet to be tested and broken to confirm that an uptrend is in the works.

The 100 SMA is below the 200 SMA to hint that the path of least resistance is to the downside or that resistance is more likely to hold than to break. This could allow sellers to return around the $75 per barrel level, which is near the 200 SMA dynamic inflection point. The gap between the moving averages is widening to reflect strengthening selling pressure as well.

RSI is on the move up to show that buyers are still in control, but the oscillator is moving close to overbought levels to reflect exhaustion. Stochastic has already reached the overbought area and might be due to turn lower to confirm that sellers are taking over.

Still, a break past the neckline could set off a rally that’s the same height as the reversal pattern, which spans around $10.

WTI crude oil could take cues from the API and EIA inventory reports this week, with the latter expected to show a smaller draw of 2.4 million barrels compared to the earlier reduction of 4.6 million barrels. This would suggest that demand has slowed, possibly due to concerns about the Omicron variant in the past weeks.

A larger than expected draw, however, might mean that businesses continue to operate as normal, likely boosting crude oil and other higher-yielding assets. On the other hand, a smaller than expected reduction or a surprise build could confirm that purchases are being weighed down.

Risk appetite and profit-taking would likely add to crude oil volatility for the rest of the week, as traders might close their books before the Christmas holidays.