' Downside risk is very minimal here'. I disagree. The historical levels of oversupply will maintain constant downside pressure on price until inventories fall. If you look at a 4 hr chart of CL with RSI you'll note the last 5 times the RSI exceeded 70 the price dropped immediately thereafter. There is a convergence of resistance that has not been broken that includes the August lows (37.75) because we are still in the neighborhood at $37.89. The 23.6% Fibonacci level sits above at $38.41. If I wanted to go long CL I wouldn't be chasing it when it's overbought on the 4hr chart with an RSI at 73.
The 4hr RSI is at 71 and the 1 hr is at 78 of the Feb light sweet crude contract. The 4hr being overbought had been an execellent sell indicator since August. The RSI is also revisiting highs while the price is making lower highs in a bearish divergence.