A key level for oil

Oil daily chart WTIOil is another commodity that has been struggling to break away from a congestion phase and building a strong level of resistance in the $40.50 per barrel a level clearly defined with the red dashed line of the accumulation and distribution indicator. As can be seen from the thickness of the line, this has been developing into a strong region and one which has been tested repeatedly over the last few weeks and once again on Friday, with this morning’s price action hovering below. But note the volume on Friday which was supportive of a move higher. The key now for the longer term for oil is a move through this region, as ahead we have a low volume node on the volume point of control histogram and as such an area which presents little in the way of resistance from a volume perspective.

In summary, if oil can reach $41.50 per barrel or beyond, at this point the bullish trend should be established once more and as confirmed by the trend monitor indicator, with the current resistance area then becoming support.

By Anna Coulling

Charts from NinjaTrader and indicators from Quantum Trading

About Anna 2016 Articles
Hi – my name is Anna Coulling and I am a full time currency, commodities and equities trader. I have been involved in both trading and investing for over fifteen years and have traded many different financial instruments, from options and futures to stocks and commodities. I write and publish articles ( mostly for free ) for UK and international publications on a wide variety of financial issues, and in particular I enjoy helping others learn how to invest and trade.

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