At the beginning of March, crude oil rose to over $120. At that time, chartists could proclaim a somewhat utopian target of $300 per barrel. Since then, black gold has been correcting and has fallen back below $100. All in all, however, it could soon go up again – at least to the high for the year at over $120 per barrel.
Below you can see the weekly chart from 2013 to present with the short-term breakout above the resistance zone just mentioned. Also inserted as a horizontal blue line is the round resistance at exactly $100. Round marks are important because very many investors and traders place buy and sell orders there.
Also drawn in is an inverted head-and-shoulders formation. The neckline had already been crossed when the energy commodity rose above $75 per dollar. So, in the long term, it could go to a new historical high.
Crude Oil Isn’t as Overbought Anymore
At the beginning of March, crude oil was in the overbought zone. With the correction of over $25, this condition was dismantled. A bottom seems to be forming. The chart below shows a seasonal forecast line for the complete year, using more than 30 years of price data.
I have marked with two yellow dots the next time periods in which crude oil can move strongly upwards. This period begins on April 27 and ends just under a month later on May 21. After that, crude oil should move sideways again until August, before possibly the next upward push.