Crude oil has been soaring high these days, but is the commodity price about to hit a ceiling soon?
Here’s a major upside barrier I’m looking at.
WTI Crude Oil: 4-hour
Thanks mostly to the EU ban on majority of Russian oil exports, the commodity has been on a tear again and is closing in on record highs.
Price has also been forming higher lows and higher highs inside a rising wedge pattern, currently testing the resistance.
Has it reached its upside limit, though?
Technical indicators are looking mixed lately, with Stochastic already reflecting overbought conditions. Turning lower would suggest that sellers are returning while buyers are taking a break.Meanwhile, the 100 SMA is still safely above the 200 SMA to show that the path of least resistance is to the upside. The gap between the indicators is even widening to signal strengthening bullish pressure.
In other words, there could be plenty of room for more crude oil gains!
A breakout above the wedge resistance AND the highs near $130 per barrel could be enough to spur a steeper rally for the commodity.
Just keep in mind that the OPEC recently agreed to increase production targets in order to ease energy crunch concerns and keep a lid on oil prices.
Who knows if Uncle Sam might opt to release another batch of oil reserves, too?
If you’re bearish on oil, better wait for reversal candlesticks to form around the resistance levels or for a break below the wedge bottom around $120 per barrel.
Good luck out there!
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