Next a look at oil. Last week, this is what I suggested on the daily chart:
Note the high volume and narrow spread price action which signals stopping volume and therefore buying. So expect to see a consolidation in the price action at this level with congestion and rally in the medium term.
So…what happened next?
Over the last few days we have indeed seen the consolidation phase develop as expected, with a mildly bullish tone. Note the buying support which arrived on Thursday last week as the market tested lower before recovering, as we approach the $52.80 per barrel area and marked with the blue dashed line of the accumulation and distribution indicator.
If this is breached in the next few days, it will provide a modicum of support with a move to the next level at $55 per barrel then likely, particularly as we have low volume nodes ahead on the volume point of control histogram. The trend monitor indicator remains bearish for the time being, so what we are looking for now, is a confirmation change in color to dark red or dark blue as bullish sentiment takes hold in the medium-term with $55 per barrel the target, and thereafter a move to $57 per barrel where the VPOC and strong resistance awaits.
Oil Developing Congestion But Preparing To Move Higher
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