Oil Bulls Fight To Recover Lost Ground After Yesterday’s Reversal

Yesterday’s bullish attempt has met a swift response and the oil price powerfully reversed lower. Earlier today, the bulls are pushing higher again, though less vigorously than yesterday or the day before. Do they have any aces up their sleeves? The risk appetite is creeping back into the market and OPEC joined by Russia may support them…

Let’s take a closer look at the chart below (chart courtesy of www.stooq.com).

Yesterday, crude oil futures moved above the early June intraday highs only to give up all the gains and reverse sharply lower. The downside move closed the gap opened by yesterday’s opening price (the upper green zone). The downswing also tested the lower gap created on Friday (the lower green zone).

Friday’s gap withstood the selling pressure and earlier today, the oil price is rebounding as it changes hands at around $53.95 currently.

Crude oil trades not only below the previously-broken late February and early-March lows, but also below the 38.2% Fibonacci Retracement and inside the declining orange trend channel. It suggests that as long as there is no breakout above these resistances, further improvement is questionable and another move to the downside can’t be ruled out.

Summing up, yesterday’s bullish upswing gave way to bearish momentum and oil reversed lower. The bulls are attempting another move higher earlier today but the oil price is trading below the 38.2% Fibonacci retracement, still inside the declining orange trend channel. Unless we see breakout above the Feb-Mar 2019 lows, another move to the downside remains on the table.

The full analysis also covers the discussion of the fundamentals – what is at stake here. You are welcome to check more of our free articles on our website, including this one. If you enjoyed the above analysis and would like to receive free follow-ups, we encourage you to sign up for our daily newsletter - it's free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to our premium daily Oil Trading Alerts as well as Gold & Silver Trading Alerts. Sign up now!

Nadia Simmons

Forex & Oil Trading Strategist

Sunshine Profits - Tools for Effective Gold & Silver Investments

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All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

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