Crude Oil Price Forecast: Poised for Bullish Continuation Amid Breakouts

Bruce Powers
Published: May 28, 2024, 20:32 GMT+00:00

WTI crude oil shows strength, challenging the 80.64 consolidation high, and breaking above key price levels, indicating potential upside continuation.

In this article:

WTI crude oil shows signs of strength today and challenges the consolidation high of 80.64. It looks like crude oil is starting to decide how it will resolve recent uncertainty as seen over more than two weeks of consolidation. It is showing strength as it broke out above several price levels today and is on track to close strong, in the top quarter of the day’s range and above each of the price levels, including the 200-Day MA.

A graph with lines and lines Description automatically generated

False Breakdown Leads to Sharp Rally

Today’s advance is the third day up after crude oil triggered a false breakdown from recent consolidation last Friday. Buyers subsequently took charge and have managed to see the price of crude advance into the third day, today. The bullish continuation today has taken crude oil above both the downtrend line and purple 20-Day MA, as well as the uptrend line.

Notice that the 20-Day MA and downtrend line mark a similar price of 79.11 around the breakout area. In other words, a significant pivot level has been busted to the upside. Today bullish price action points to likely upside continuation.

Attempting Four-Week Breakout

Again, today the high is marked as potential resistance by two price levels, the most recent swing high at 80.64 and the long-term downtrend line. It is also a weekly high. The downtrend line starts from the March 2022 peak of 130.61. A decisive rally above 80.64 will trigger a bullish continuation on both the daily and weekly chart, which will be confirmed on a daily close above that price level. Once that happens, in the short term the next higher target would be the 50-Day MA at 82.04.

Watch Long-Term Downtrend Line

The long-term downtrend line has some significance for crude oil. It was initially broken to the upside on April 1, but it subsequently failed to hold as support and a breakdown occurred on April 30. That was followed by a correction to last week’s low. A second bullish breakout of a long-term trendline is bullish. That happened today and will likely be confirmed by a daily close above the line.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Bruce boasts over 20 years in financial markets, holding senior roles such as Head of Trading Strategy at Relentless 13 Capital and Corporate Advisor at Chronos Futures. A CMT® charter holder and MBA in Finance, he's a renowned analyst and media figure, appearing on 150+ TV business shows.

Did you find this article useful?