In my last post for oil I highlighted the well developed area of support at the $58 per barrel region and its significance to the longer term direction for crude, and hence if breached might then signal a reversal of the bullish trend. Since then, this has indeed been the case and the price action which followed my last analysis merely confirming the importance of this region.
What we see now have is a much wider red dashed line delivered by the Accumulation & Distribution indicator for NinjaTrader as this level holding firm before finally being breached yesterday with the wide spread down candle on good volume, and returning us to the volume point of control below at $56.20 per barrel. This is denoted with the yellow dashed line.
So where next for oil? Another key level awaits below at $55 per barrel and denoted with the blue dashed line. Another strong level which may provide support as it has done in the past. But if this is taken out also we might see oil trading back at $52 per barrel in the medium term.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
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