No introduction necessary. Crude Oil has traded like death for several months, laying claim to several trading victims who tried to pick up a dime in front of the bulldozer. But Friday’s Crude Oil rally gave bulls a reason for hope. A lonely white weekly candle.
I’ll let the chart below do the explaining, but Crude Oil has not seen a long white weekly candle since its “all too orderly” tumble last July. In fact, the Crude Oil rally on Friday even allowed the candle to sport a nice lower wick. Could this give be the key to a rally?
Well, let’s not get too excited. This isn’t a call for a bottom. Not even close. But it’s a promising development for short to medium term traders to monitor.
Crude Oil Weekly Chart – A Lonely White Candle
Drilling down to the daily chart, you can see the nice white daily candle from Friday’s Crude Oil rally. Looking ahead, a strong move above $50 would be constructive. It is also necessary for any traders holding long positions looking for more than a buck or two. A move over $50 could trigger a rally back to its 50 day moving average near-term (call it the $55-$60 range). I would need to see more price action before determining if Crude had more gas in its rally tank.
To be fair, though, traders must also acknowledge that Crude Oil could simply continue lower. Any asset that looks like this, requires stops. It’s been a bearish beast.
Crude Oil Daily Chart
Thanks for reading. Have a great weekend.
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No position in any of the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
