CFD News – Could Oil Sellers be Starting a New Breakout?
Thanks for stopping by for Monday’s update. Today’s focus is on oil’s daily chart as sellers have made an aggressive move and have started to confirm a pattern breakout.
Looking at the overall trend structure, we can see a LH has formed just before sellers broke the long-term uptrend. Since that break, we have seen a series of LHs and LLs showing a normal pattern of trend since the last LL price formed a series of points that formed a triangle/wedge pattern.
Since this pattern is in an established downtrend, we will look for the pattern to become a continuation pattern if sellers can confirm a new lower breakout. As shown in the chart below, we can see that today’s price action has started to form a new breakout, but we still need to see sellers confirm with a solid close lower.
The issue sellers could face is seen lower at the two levels of support/demand. If we do see the price move lower, we will be watching to see if sellers can clear those two levels. At that stage, it will be quite clear that a new continuation is underway and that price is resuming its current downtrend.
If buyers reverse today’s selling and move above $101.90 we will be calling this idea a bust for now.