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Bullish Set-Up For Oil

Published 09/30/2016, 02:48 AM
Updated 07/09/2023, 06:31 AM

Oil climbed 7% from yesterday’s low to high in reaction to the OPEC cutback news.

More importantly, perhaps, the overnight price action has been well-behaved, near the $47 area. This suggests that after Wednesday’s vertical upmove, oil is building a bull-flag digestion period prior to upside continuation towards a test of the August high at $48.75 — in route to a challenge of the June high at $51.67.

After just about every strategist and analyst took to the airwaves with an opinion about the OPEC deal and the prospects for oil prices — that the deal will fail, and that prices will reverse — it is very impressive technically that oil is perched just off of yesterday’s highs.

This is a warning to the bears that “this time just might be different.”

Crude Oil Hourly Chart

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