Bullish sentiment continues to oil with $37 per barrel now in sight

WTI daily chartLast week’s price action for oil was another market where a strong technical picture is now developing as bullish momentum for the WTI August contract remains firmly in place and here again, it is Friday’s price action which delivered the significant break, with the candle breaking through strong resistance above the $34 per barrel region and denoted with the red dashed line of the accumulation and distribution indicator for NinjaTrader. The indicator presents these levels as thicker or thinner depending on the number of times a level is tested and holds, so the thicker the line the stronger the region.

This was the fifth straight week of gains for crude oil. Equally important, the price is now attempting to break away from the volume point of control which sits firmly at $32 per barrel and with a low volume node now on the horizon, oil looks set to make further gains in the near future and on towards this level at $37 per barrel.

From a fundamental perspective, two issues will dominate. First, whether the current supply agreements continue to hold although cracks are already starting to appear. Second whether there is likely to be an uptick in demand. Both are fragile and have the potential to derail the longer-term bullish sentiment, but for now, $37 per barrel looks set to be the next target.

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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