Crude oil established a higher swing low on Tuesday as a one-day bullish reversal triggered. The advance followed a new higher swing low of $55.81, the low from Monday, and reached a high of $60.04. If that low price continues to hold as support, it could be the second bottom of a potential double bottom formation.
Regardless, bullish behavior on Tuesday improves the chance that at least a short-term bounce may have a little further to go. At the time of this writing, crude oil continues to trade in the top third of the day’s trading range. It is on track to end the session with a wide range green body candlestick pattern, showing buyers in control at the close.
Downtrend Dominates
There is a good chance of seeing a test of resistance around the 20-Day MA, now at $61.28. The 20-Day line was successfully tested as resistance twice prior to last week’s sharp drop that triggered a bear flag pattern. Therefore, the behavior of the price of crude oil around the 20-Day line may provide insight into demand and whether buyers are aggressive enough to lead to a reclaim of the 20-Day MA. If the 20-Day line is reclaimed with a daily close above the line, higher price targets can begin to be considered.
