Oil consolidating in anticipation of big move

Crude oil has been trading sideways for the past year between the 2011 high and low. The trading range through 2012 has been contracting with a series of lower-highs and higher-lows. Because this pennant formation is taking place after an uptrend is a bullish pattern with $110 and possibly even $140+ per barrel in the next 6-18 months.

If you look at the weekly investing chart of crude oil the key support and resistance levels area clearly marked. A breakout of the white pennant will trigger a move to the next support or resistance level. And judging from the positive economic numbers not only form the United States but globally the odds are increased for the $110+ price target to be reached sooner than later.

Crude Oil Price Chart – Weekly Investing

Crude Oil Price Chart – Daily short term Analysis & Target

If we zoom into the daily chart and analyze price and volume, you will notice the $100 per barrel level is potentially only 2-3 days way… But keep in mind whole numbers (decade & century numbers) naturally act as support and resistance levels. So when the $100 price is reached, there will be a wave of sellers with fat thumbs who will slam the price back down to the $96 and possibly back down to the $92 level before oil continues higher.

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