May and the first half of June were pretty hopeless for bears on the oil market. The oil price climbed higher almost every day from the support at around $100 and resistance around $126. And all of that was happening with a stronger USD which, in theory, should be a negative factor. That showed us just how strong the demand for the oil was. Rising oil prices became a legitimate concern worldwide for almost everyone apart from the oil-producing countries.
However, the new week brings hope for sellers. The cracks are starting to appear in the bullish plan on oil. Brent managed to create the triple top formation (blue), and it happened in a nice spot, so the resistance is around $123 (yellow), tops from March this year.
Currently, the price is testing two crucial supports. The first one is the neckline of the triple-top formation (purple), and the second one is the mid-term up trendline (black). Those two lines keep the bullish dream alive. Price breaking them would bring us a sell signal.
If it happens, the target for the drop will be $115. This area proved to be a significant resistance in April and May and can be a support now. If that line is broken too, the next target would be the red up-trendline, which is connecting the mid-term higher lows.
Chances we’ll get there are not limited, but a breakout of the green support would lift them significantly. So now, all eyes are on the black and purple supports. A breakout there could imitate a nice bearish move.
