Oil turning bullish; or more pain ahead? 😬

What's up traders.

Getting this one out to you all before the week starts — shifting gears a bit & looking at the Oil markets.

Often times analyzing commodities can give us a clearer picture of the broader markets as a whole.

We've been looking closely at the current global oil landscape, and we're starting to feel that it may turn bullish for a change.

Let’s dive right in…

It's safe to say that the first half of 2022 was a bull run up to $122, and the second half of 2022 was a bear run down to $71. 

However, right now it feels like the tides are turning to start another bull run.

We feel it could become strong into Q2 and possibly Q3.

It seems that Oil has created a double bottom on the daily charts with $72 price steadily holding as a baseline support.

Bears can't seem to break through and stay oversold for very long.

To add to this, our momentum indicator is showing a bullish divergence compared to the price action on the daily chart as shown with the white line below: 

We'll also be anticipating a bull alert to show up on this daily chart.

When that happens, we will wait to see how price tests the thick AlgoBuddy ribbon, and if it respects it that is a great sign of strength. 

If bulls continue to show up, we'll be looking to join them, and also keeping an eye on another test of the 100 day MA around $82.

This is where we’ll closely watch price action. Another case for bulls is that global oil demand is staying strong: as stated in the latest EIA report below: 

So long as global demand stays strong for oil which has been the recent case, we’re expecting the price to make its way past $80. 

Keep in mind this is in no way financial advice, so take our analysis at your own risk. 

As always, this outlook could change if any dramatic events slow the demand for oil consumption globally which we all know the probability is not 0. 

SO…

Keep your eyes peeled, head on a swivel, and always manage your risk properly. 

-The AlgoBuddy Team