Oil Keeps Testing A Major Resistance. For How Much Longer?

Let’s recall our Friday’s observations:

(…) Crude oil futures extended gains, breaking above the upper border of the rising green trend channel during yesterday’s session. This upswing took the futures right to the red gap. Let’s see how this has reflected upon the daily indicators.

They look quite extended, suggesting that the space for additional gains may be limited and that a reversal is probably just around the corner.

Should it be the case, and the futures move lower from here, the first downside target for the sellers will be yesterday’s green gap. If the bears close it, the next target will be the lower border of the purple consolidation and the next green gap, which is where our initial downside target currently is.

The situation has developed in tune with the above, and crude oil futures have indeed pulled back to our first downside target. However, the bears just couldn’t close the green gap, and the bulls took advantage, forcing a daily close above the upper border of the rising green trend channel.

This is certainly a bullish development, and the buyers followed through with more upside action. While crude oil futures moved above $61.90, the sizable red gap remain in play. It keeps supporting the bears and lower values of the futures in the coming week(s).

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Thank you.

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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