Major upward move could be observed on the oil market yesterday with WTI finishing the day 2.1% higher. A move of this scale was a result of breaking a key resistance zone. In turn, a potential reversal pattern surfaced on the chart -a double bottom formation that often heralds an upward move. Oil market has been in a downtrend during the past two months.. However, following a break of the $54.55 handle, bulls seems to be in favour. A break below this support level would invalidate bullish set up.Source: xStation5
The oil market has been in a downward trend for two months. However, during the past three weeks, the price was consolidating in a wide range of $51-54.55. After breaking above the 54,55 handle, the movement accelerated. There are no sell signal on the chart, but correction could occur given recent rapid gains.
We are now observing the supply-side reaction to the local resistance. In case a bigger pullback occurs one should take into consideration the $56.10 handle where market geometry (1:1) can be found. This is the key short-term support for now and a break below it could trigger more selling.Source: xStation5