Red lines- bearish channel
Blue line -resistance trend line
Oil price is trading above $77.60. Although price remains inside the red downward sloping channel, in the near term oil price has broken above the key short-term resistance trend line at $76.20. Oil price has provided us with a sign of strength after a long time. This latest sign of strength, makes us expect Oil price will continue higher towards $81.20. Support is found at recent low at $74.06. As long as price is above this level, bulls have hopes for a bigger reversal to the upside. We are turning bullish Oil at current levels as the chances for a bigger move higher have increased.