It was not long ago that the world was stunned watching oil dropping below zero, shocking many savvy traders and non-traders alike. Fast forward a couple of months, and oil has been steadily climbing higher, and is back to where it was a year ago, at pre-pandemic levels.
Let’s use the top-down approach and look at the monthly chart first. Here we can see that the market is now in a confirmed uptrend, although the moving averages (MA) have not yet changed direction.
Turning our attention to the weekly chart, we see steady buying momentum, with MAs fanning and in the correct order for an uptrend (10 MA is above the 20 MA, which is above the 50 MA).
We can also spot from the weekly chart that the market has broken through a significant level of support and resistance around the 56.5 area. Zooming out on the weekly chart, we can see many touches and strong reactions to this level in the past.
Moving into the daily chart, we can see that the market has been consolidating underneath this strong level for a while, before finally breaking through, closing at the high of the daily candle, with the next daily candle also closing at the high, suggesting the presence of buying pressure.