I’m seeing several technical signals lining up for a bounce on crude oil!
Do market factors support a continuation of the climb?
Here’s what I’m lookin’ at:
WTI Crude Oil: 1-hour
Crude oil has been drawing support from geopolitical tensions lately, as the prospect of more sanctions on Russian oil is keeping markets wary of an energy crunch.The commodity is in correction mode, though, finding support at a short-term rising channel that’s in line with the 100 SMA dynamic support.
This faster-moving MA is above the 200 SMA to confirm that the climb is more likely to resume than to reverse. To top it off, Stochastic is suggesting that sellers could use a break, and the oscillator is showing a bullish divergence, too!
If current levels hold as support, crude oil could find its way back up to the channel resistance at the $120 per barrel mark.
This might also be enough to confirm a breakout from the neckline of the inverted head and shoulders pattern highlighted above. In that case, the commodity might be in for waaay more upside, possibly rallying by the same height as the reversal formation.
Just make sure you keep tabs on headlines about Russia, as world leaders are upping the pressure on the country to stop the attacks on Ukraine.
Any signs of easing tensions might prompt profit-taking and a break lower for crude oil. Better keep an eye out for potential weekend gaps also!
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