School has started and after nearly two weeks the kids are coming up to their first quizzes and tests. A time of anxiety for many but for some just another day, no big deal. As we approach the end of August and the long Labor Day Weekend, Crude Oil also is approaching its first test on a few weeks. After a bounce off of the 200 day SMA 2 weeks ago, the first touch in over 22 months, Crude Oil has been rallying.
The chart below shows the push higher off of a lower low. A good first move but the reality is that Crude oil remains in a downtrend. A lower low after a lower high, signals that this reversal is still just a strong bounce and not a confirmation of a new trend higher at this point. What will it take to change that?
A move over $71 per barrel. A continued move higher in the price of Crude Oil, and over that $71 mark would make for a higher high. It would also trigger a target of over 73 on a Measured Move higher. There is support for this with the momentum indicators building toward bullish ranges. The RSI is just under 60 with the MACD about to turn positive. And the last few days the Bollinger Bands® are also starting to open up to allow a move. There are no certainties in markets, but it seems that Crude Oil is ready to pass this test.