Oil Is Heading Higher – Time to Open a New Position?Oil bulls are a battle-hardened species. Not only have they rebuffed the bears’ attack to close higher yesterday, but they’ve also been building upon their gains earlier today too. Right now, they’re in the vicinity of an important resistance level. Will they manage to break above it? We’re not too far from opening a new trading position…
Let’s take a closer look at the charts below:
Yesterday’s session opened with the bears taking oil lower only to see the bulls take initiative and close the day above the previously-broken lower border of the blue consolidation.
The buy signals continue to support the buyers but there’s a fly in the ointment – the decreasing volume of the upswing. Let’s take a look at the action in the futures for more clues.
Earlier today, the oil futures opened with a bearish gap, but the bulls haven’t given up – they have managed to close that gap before long. At the moment of writing these words, black gold is trading at around $56.50.
Crude oil futures have invalidated their earlier breakdown below the consolidation that took shape after the waterfall slide of Aug 1st. Coupled with the buy signals of the daily indicators, this suggests further price improvement. Such a bullish outcome would be more likely and reliable though only if the futures break above the 38.2% Fibonacci retracement first.
black gold has invalidated its breakdown below the recent consolidation, and the daily indicators suggest further improvement. The only cautionary sign is the comparatively lower volume of yesterday’s session. Should we see oil bulls appear in strength and overcome predefined hurdles we’ve shared with our subscribers, we’ll consider opening long positions.
Forex & Oil Trading Strategist
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