Last week was solid for crude oil as the commodity continued to develop further bullish momentum, as expected. This has continued through into the new week following the US holiday yesterday. It now approaches $85 per barrel, an area I outlined in my previous post as the initial target in the short term as we trade at $84.67 per barrel at the time of writing.
Price and volume are in agreement here. What catches the eye on the daily chart is not only the gapped up open, but more importantly than this, is the fact it has cleared the price resistance area at $83 per barrel with ease and which in turn now offers an excellent platform of support for a run on towards the $90 per barrel region long term. Note also last week’s price support on Thursday with the narrow spread down candle on good volume as buyers stepped in to deliver a solid up day on Friday on steady volume.
Now let’s take a look at the monthly chart as the weekly has little to add to this analysis at present, and it is this chart where we can see it is starting to get interesting to oil bulls.
Note the strong resistance level at $82 per barrel and denoted with the red dashed line of the accumulation and distribution indicator for NinjaTrader. This level is key as it capped off advances back in 2018, and more recently, earlier this year. As long as the price holds above for the rest of the month, it will provide a solid platform higher for a move towards $90, and later in the year, perhaps on to three figures. Time will tell.
