WTI crude oil could be in for a reversal from its climb as price is starting to form a double top on its 1-hour chart. Price could be due to test the neckline around $52.50 per barrel, and a break below this could confirm that a downtrend is underway.

The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that the climb is more likely to gain traction than to reverse. The gap between the moving averages is also widening to reflect strengthening bullish momentum. Price is trading above the 100 SMA, which recently held as dynamic support.

However, stochastic is already indicating overbought conditions and looks ready to turn lower to reflect a return in selling pressure. RSI is heading south without reaching the overbought zone, hinting that sellers are eager to return.

Crude oil drew support from stimulus hopes, as well as the vaccine rollout. US President-elect Biden has called for $1,400 in stimulus checks, which could shore up business and consumer activity, thereby lifting demand for fuel and energy commodities.

Biden’s proposal would provide $20 billion for a national vaccination program, $50 billion for COVID testing, and $350 billion for state and local governments. This could bring about an earlier economic recovery than initially anticipated, which would also be positive for risk assets.

The EIA reported a draw of 3.2 million barrels in stockpiles as expected, smaller than the earlier reduction of 8 million barrels. This was also lower than the amount reported by the American Petroleum Institute, but a draw nonetheless.

The Baker Hughes oil rig counts report might be the next main catalyst for crude oil, as a large increase in rigs could lead to oversupply fears.