Crude oil rallied right up to $64.01 on Wednesday before stalling its advance. That was a successful test of resistance at the three-week high of $64.06, the next key price level for crude oil to encounter. Of course, it has greater potential significance since it is a weekly high and because a rally above that high would show continuing strength in the price of crude oil in the face of potential resistance. Also, a rally above last week’s high would give another indication of a bullish reversal in the weekly time frame. Since the weekly pattern takes precedence over the daily, that would be bullish for the daily pattern as well.
Bulls in Charge
Tuesday’s advance becomes more interesting when noticing the relatively bearish potential shooting star candle pattern from yesterday. It looks like bullish momentum went away. Now that it is back the momentum of the upswing has the potential to intensify. As the price of crude rises and takes out higher potential resistance zones, the potential for it to continue to rise improves.
Not only because of the potentially bearish behavior on Monday but also the higher daily high and higher low established today along with a likely strong bullish closing price. At the time of this writing crude oil continues to trade near the high of the day and looks likely to close the day in the top third of the day’s trading range. Of greater significance would be a daily close above Monday’s high of $63.74.
