It has been a long hard slog for Oil in recent times, with both Crude Oil West Texas and Crude Oil Brent taking the best part of a year to regain pre-Covid prices. This year-long rally has resulted in the formation of an uptrend that has, and could still, yield some swing trading opportunities to the upside.
After a brief stint in 2018, neither Brent nor West Texas have spent much time above $70 per barrel since 2014. Both currently sit very close to their horizontal levels in this area.
Looking at the monthly chart of Crude Oil West Texas above, the price is sitting just above the key level of $65.00 (in blue), with some space above up to the next important levels of $70 (red) and $75 (pink) should price continue to rally.
On the daily chart, there’s an upward trend in place, with price action forming higher lows and higher highs, and the 10, 20, 50 and 200 (off the chart to the bottom) moving averages (MA) lined up and showing good bullish geometry. Both the MACD and the RSI indicators are trending higher in a bullish fashion, which could confirm the trend momentum to the upside.
The combination of this price action and the indicators suggests that there’s a potential for possible long swing trading opportunities. Price has already pulled away from the buy zone around the 10 and 20 MAs, so there’s potentially a new high to form above the high from 5 May, followed by a pullback into the buy zone on this timeframe.
There’s an uptrend that has started to resume, with a higher high in price action being formed. A pullback into the buy zone on this timeframe could form the higher low.
The geometry of the MA is returning to a bullish state, with the 10, 20, 50 and 200 MA starting to align. The recent bullish convergence of the momentum indicators could suggest a further push to the upside is possible. There’s a potential pullback into the MA on this timeframe, along with a small bullish bar printing in this area, in order to look for a long trading opportunity. The pullback could also coincide with, or come close to, the $65 level, and the distance between here and the next important level at $70 could result in a high reward to risk trade.