Crude oil continues its bullish momentum and set to move higher still

oil daily chartAs for gold, so for crude oil which contains to maintain a very bullish tone as I have been forecasting over recent posts for the commodity which is now set to take out the $85 per barrel level and move on towards the $90 per barrel region longer term. Here, I think it is worth considering both the daily and monthly charts, and if we start with the former, we can see the extent of buying support which continues to drive the price higher. As we can see both Wednesday and Thursday were significant as we press forward into the low volume node at the top of the chart. Note on both days, whilst there was a sustained move lower, on each day the buyers stepped in firmly with the big operators reversing these moves on high volume signaling their strongly bullish intent with both candles closing with deep wicks to the lower body. And whilst Thursday’s candle closed with a negative body, nevertheless, the intent was clear and confirmed on Friday which closed out the week with a solid up candle on good volume. This has also been reinforced in early trading at the start of the new week, with the price of oil moving firmly higher on a gapped up open to trade at $84.68 per barrel at the time of writing.

oil monthly chartMoving to the monthly timeframe here we can see the key area on the chart. First, this month the solid up candle to date with good volume has thus far and more importantly taken out the resistance area of 2018 which saw the price plunge. Second, we are continually moving into areas of reduced volume on the VPOC histogram, making progress easier and more straightforward, with the longer-term target of $90 per barrel now clearly in view at the top of the histogram. Note also the strong buying which arrived in both July and August in this time frame with the deep wicks to the lower body and again, as on the daily charts, sending a strong signal of bullish intent to those traders who apply the volume price analysis methodology.

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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