Crude Oil Set To Move Higher As It Continues Its Bullish Momentum
Anna Coulling | Oct 25, 2021 10:43AM ET
Like gold, crude oil maintains a very bullish tone. As I have been forecasting, the commodity is now set to take out the $85-per-barrel level and move on towards the $90-per-barrel region longer term.
Here, I think it is worth considering both the daily and monthly charts. If we start with the former, we can see the extent of buying support, which continues to drive the price higher. As we can see, both Wednesday and Thursday were significant as we the low-volume node at the top of the chart indicates. Note on both days, while there was a sustained move lower, buyers stepped in firmly on both days with the big operators reversing these moves on high volume signalling their strongly bullish intent with both candles closing with deep wicks to the lower body. And while Thursday’s candle closed with a negative body, the intent was clear and confirmed on Friday, which closed out the week with a solid up candle on good volume. This has also been reinforced in early trading at the start of the this week, with the price of oil moving firmly higher on a gapped-up open to trade at $84.68 per barrel at the time of writing.
Moving to the monthly timeframe, we can see the key area on the chart. First, this month, the solid up candle to date with good volume has thus far taken out the resistance area of 2018, which saw the price plunge.
Second, we are continually moving into areas of reduced volume on the VPOC histogram, making progress easier and more straightforward, with the longer-term target of $90 per barrel now clearly in view at the top of the histogram. Note also the strong buying that arrived in both July and August in this time frame, with the deep wicks to the lower body. Again, as on the daily charts, this is sending a strong signal of bullish intent to those traders who apply the volume price analysis methodology.
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