Solid gains for oil this morning as the WTI futures contract continues to build on bullish momentum and following on from the break away from congestion on Friday which propelled the commodity up towards the $30 per barrel and closing just short at $29.52 per barrel. The start to the week has seen the price of oil open gapped up before surging higher to currently trade at $32.14 per barrel. So the question now is where next for crude oil, and from a technical perspective, there are several things to consider.
First, the breakout from the extended congestion phase of last week was accompanied with good volume confirming the move as genuine and breaking through the resistance at $27 per barrel at the same time which now presents a solid platform of support as the trend develops.
However, the move higher has taken the commodity to the volume point of control (denoted with the yellow dashed line) and we can, therefore, expect to see congestion develop in this area before the next leg of the bullish trend develops. Note the trend monitor is not only confirming the current mood for oil but also the expectation for oil to advance higher at least to the resistance now ahead at $34 per barrel. Of course, any breakthrough here will require good volume, and if achieved, as volume falls away on the histogram we can expect to see $36 per barrel and beyond in the medium term.