In our previous analysis on Oil, we identified a bullish pattern of an inverted Head&Shoulder. Our target was 53.50-54$ and we got there. What now? There are some indications that a pull back is imminent.
In the 4 hour chart as shown above I see the RSI diverging and MACD that has already crossed over to the downside. These are simple warnings for bulls. When price breaks below 53.75$ we will have confirmation of a bearish signal that should push price towards 52-51.50$. So I expect prices to roll over from current levels and fall towards the upward sloping blue trend line and the Ichimoku cloud support.
On a weekly basis Oil prices have broken above the weekly Kumo (cloud) and above the black long-term downward sloping trend line resistance. I could see a back test of this broken resistance and then resumption of the up trend in oil. So now it is time to be neutral or bearish oil looking for a buying the pull back opportunity around 52$.
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