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Crude bulls are on the move

The Crude Oil market on the D1 time frame was in an extended downward move until 26 September when a lower bottom was recorded at 76.13. Demand started overcoming supply and the bulls started to move in. 

A closer look at the Momentum Oscillator reveals

positive divergence between points “a” and “b” when comparing the bottoms at 83.74 and 76.13. This could have alerted technical traders that the downtrend might be losing momentum. 

After the lower bottom at 76.13, the price of Crude Oil broke through the 15 and 34 Simple Moving Averages and the Momentum Oscillator cut through the 100 base-line into bullish terrain.  

A higher top and possible critical resistance level formed on 10 Oct at 92.59. Bears then tried to drive the price lower but the bulls did not allow that and a higher bottom started forming at a support level on 13 October at 84.51. 

If the bulls manage to break through the critical resistance level at 92.59, then three possible price targets can be calculated from there. Applying the Fibonacci tool to the higher top at 92.59 and dragging it to the bottom of the support area at 84.51, the following targets can be considered. The first target can be likely at 97.58 (161%) and the second price target at 105.66 (261.8%). The third and final target may be expected at 118.74 (423.6%).

If the support level at 84.51 is broken, this scenario is not accurate and needs to be re-evaluated.

As long as the bullish sentiment stays intact, the outlook for the Crude Oil market on the D1 time frame will remain upwards.



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