Crude oil price rebound evolves into bull flag formation
The price of oil appears to be trading in a narrow range as it bounces along the 50-Day SMA ($87.54), but crude may attempt to retrace the decline from the monthly high ($93.64) as a bull-flag formation appears to be taking shape.
Technical forecast for oil price: bullish
The price of oil snaps the recent series of lower highs and lows despite trading to a fresh weekly low ($85.20), and the continuation pattern may unfold over the coming days as crude no longer responds to the negative slope in the moving average.
The bull-flag formation is likely to stay in play as long as the price of oil retains the advance from the monthly low ($80.87), with a break/close above the $90.60 (100% expansion) to $91.60 (100% expansion) region bringing the monthly high ($93.64) back on the radar.
Next area of interest comes in around $93.50 (61.8% retracement) to $95.30 (23.6% expansion), with a move above the 200-Day SMA ($97.34) opening up the $100.20 (38.2% expansion) area.
However, the price of oil may threaten the opening range for October if it struggles to hold above the $84.20 (78.6% expansion) to $84.60 (78.6% expansion) region, with a break below the monthly low ($80.87) bringing the $78.50 (61.8% expansion) to $79.80 (61.8% expansion) area on the radar.
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This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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