Bearish formations, invalidations and potential scenarios.
In today’s oil price forecast, I decided to share with you my insights from today’s Oil Trading Alert. Have a nice read!
Technical Picture of Crude Oil
The first thing that catches the eye on the daily chart is today’s higher open (Asian trading hours), which formed a green supportive gap ($73.92-$74.22).
Thanks to this price action, crude oil futures came back above the previously broken upper border of the green channel (seen from the 4-hour perspective), invalidating the earlier breakdown.
The combination of these two positive developments together with the buy signals generated yesterday by the 4-hour indicators encouraged the bulls to push the price even higher.
In the following hours, they not only attacked three bearish candlestick formations (the shooting star and two bearish engulfing patterns marked on both time frames), but also the orange resistance gap, which was strong enough to stop them earlier this week.
Their determination resulted in a breakout above the upper line of the gap and attack on the 78.6% Fibonacci retracement (which together create the third resistance zone), which were the last stop before the Oct.10, 2024 intraday high.
What could happen if the bulls do not give up and push the price above it?
In this case, the way to around $77.74 could be open. Why there? Because in this area the size of the upward move will correspond to the height of the short-term purple rising trend channel marked on the daily chart (both ranges are marked with the purple rectangles).
At this point, it is worth noting that the buy signals generated by the 4-hour indicators remain in the card, supporting the bulls and their rally, which together with the buy signal generated by the daily Stochastic Oscillator suggests that realization of the above-mentioned scenario could be just around the corner.
Summing up, crude oil futures opened Friday with the green pro-growth gap, which took them above the previously broken upper line of the green channel In this way, oil bulls invalidated the earlier breakdown, which together with the buy signals generated by the 4-hour indicators triggered attack on the next resistances. Taking oil bulls’ show of strength into account, it seems that we could see further improvement in the following hours.
Have a profitable day, a wonderful weekend and see you on Monday.
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Anna Radomska