Crude Oil Futures Push Above Resistance

Crude oil futures have enjoyed a bullish run in recent weeks, rising about +11.6% since the recent lows on June 4 to yesterday’s close and are once again climbing above the $80 a barrel mark. The low point from Jun. 4 represented the bottom of a V-shaped price move after several weeks of price action that was largely sideways, but now price is pushing to the upside above resistance as well as above its relative highs from late May.

The technical picture seems to be improving for the bulls in the /CL contract. Several major moving averages, such as the 21-day, 63-day, and 252-day Exponential Moving Averages, were clustered together roughly around the 78-79 area. This type of confluence suggests weak overall trend direction, but price has now closed above all three of these moving averages and is continuing to move higher. The moving averages themselves also are sloping upward now, which is another bullish sign.

This area near 78-79 includes even more important technical indicators. The yearly Volume Profile Point of Control (which is the price area with the heaviest trading volume in the given time period) is at about 78. This can be a key level of support or resistance, and it’s worth noting that price has now cleared above this area.

Additionally, the yearly Linear Regression Line (line of best fit based on closing prices) is at about 79, so this was another significant hurdle for price to clear. Momentum has improved as well, with the Relative Strength Index (RSI) crossing above its 50 midline and making new relative highs.

In terms of support, the 78-79 general area remains the important point to watch for price to find a foothold. Beyond that, look to the yearly -1 Standard Deviation Channel and the bottom of the V-shaped lows from about 72.50 to 73.50. To the upside, the yearly +1 Standard Deviation Channel comes in near 84.40.