Crude oil is flirting with a trend reversal.
Crude has been confined inside of a narrowing pennant pattern for the past few months. A couple of weeks ago, it started trying to break above pennant pattern resistance. So far, it is a couple of percent above the top of the pennant pattern.
Now crude is testing its 2015 highs at (2), which if it manages to take them out, we should see buying pressure.
What happens at (2) should have a large impact on portfolio construction in the energy sector and potentially beyond going forward.