In my last post for oil I highlighted the well developed area of support at the $58 per barrel region and its significance to the longer-term direction for crude oil, which if breached might signal a reversal of the bullish trend. Since then, this has indeed been the case and the price action that followed my last analysis merely confirms the importance of this region.
What we now have is a much wider red-dashed line delivered by the Accumulation & Distribution indicator for NinjaTrader and this level holding firm before finally being breached yesterday with the wide, spread down candle on good volume and returning us to the volume point of control at $56.20 per barrel. This is denoted with the yellow dashed line.
What's Ahead?
So where next for oil? Another key level awaits below at $55 per barrel and is denoted with the blue-dashed line – another strong level that may provide support as it has done in the past. But if this is taken out, we might see oil trading back at $52 per barrel in the medium term.