Short-term Target Reached
Nonetheless, today’s high of $70.60 was a successful test of resistance around a prior support trendline and it completed the initial target for a rising ABCD pattern. Given the wide trading range for today, a pullback to test support around the 200-Day MA, now at $68.43, would be possible. It can be watched along with a minor swing high of $68.77 for possible support.
Notice that crude oil could continue to rise towards the next higher target zone of $71.73, yet remain below the rising trendline, which is also a lower channel line. That target zone is the confluence of a 50% retracement level and a 127.2% projected ABCD target at $71.84.
Higher Resistance Zone
Since the rally reached a five-week high, there is the potential for higher targets to eventually be approached. The 20-Week MA (not shown) is also providing bullish evidence for further strength. It was essentially a match of trend support that is represented by the 50-Day MA on the daily chart. If crude can retain strength into Friday, it might have its highest weekly closing price in six weeks.
Buyers Return
Nonetheless, it looks like a continuation of strength would be in reaction to the sharp rapid decline from the $78.44 swing high hit five weeks ago. It seems like if correct, a sharp rally into the next higher target zone might be possible. Bullish momentum clearly improved today, and the day’s low was a successful test of support at the 20-Day MA.
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