In August our longer-term signals turned bullish in Oil when prices were trading just above $40. The initial target was at $51.34 and a potential target from a reverse Head & Shoulders formation is at $75.00. While this did raise some eyebrows our 1st target for Oil has been met.
A pullback from the neckline was expected, but improving sentiment since November and a spike higher this week has taken prices above this important level. However, that spike has attracted sellers and the formation of a daily Shooting Star and a potential Island Top may indicate that this recent rally too may not be strong enough to continue just yet.
A break back below last week’s close at $51.48 should see sentiment deteriorate towards a bull trend at 47.50. This level should hold and Oil sentiment should then rally. If the window left open since last week’s close remains that way then gains above $54.51 targets $58.74, $62.58 and ultimately $75.00.