crude graph 88 298.
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The recent rally in crude oil prices, which has seen the commodity spike from $60 to $75 a barrel in less than a month, appears on a technical basis to be in need of a correction over the coming days.
"Whilst this chart looks bullish, it may be in need of some short-term consolidation," commented Lawrence Peterman, investment director at Eden Financial in London.
As can be seen in the accompanying graph, although the climbing oil price ran into resistance at the $65 level in the beginning of April and the rally faltered temporarily, the commodity soon continued its surge to uncharted territory. On the way up, the price has barely paused for breath, suggesting to that there will be a period soon where sellers consolidate their gains, and new buying is put on hold until the price is back at a more sustainable level.
"The price can't go up in a straight line indefinitely and may need to pause... however, the long-term trend is still up," Peterman added.
Even with the anticipated pullback, Peterman expects the oil price to stay above $60 (which has proven to be a support level over the past few months) in the near future.
Technical analysis is the study of trading based on previous performance, focusing exclusively on price movements rather than the fundamentals of the index/commodity involved.
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