At Extreme Investor Network, we provide expert analysis and unique insights into the stock market, trading, and all things related to Wall Street. Today, we want to discuss the recent test of trendline support in the market.
Support was tested today at a low of 82.98, close to the 83.02 resistance from Friday. This low completed a test of support at the lower internal uptrend line. Over the next few days, the 83.02 to 82.98 rough price zone can be used as a proxy for potential support around the line. Additionally, the top of a small expanding triangle may provide another price area where support is seen. Keep an eye on other possible support areas during a pullback, including this week’s low of 81.69 and the prior swing high of 81.00 from late May.
In other news, there has been a completed 16.4% advance in the market. Crude oil recently experienced a healthy aggressive rally that stopped and reversed right on target (downtrend line/78.5% Fibonacci level). This reversal in momentum has led to more aggressive profit-taking as the target was relatively obvious. If crude oil had continued above the downtrend line, the risk of a sharper correction would have increased. However, the developing pullback is expected to provide a more reliable launching pad for another attempt at an upside breakout, with a better chance of seeing a sustained advance above the downtrend line.
Lastly, the monthly chart confirms a bullish move in the market. A bullish monthly reversal was triggered as crude oil rallied above last month’s high of 83.02 and closed above it on a daily basis. With the longer-term time frame providing the more dominant pattern, crude oil has a good chance of breaking out of the symmetrical triangle pattern with another rally and daily close above the downtrend line.
For more insights and detailed analysis of today’s economic events, be sure to check out our economic calendar on Extreme Investor Network. Stay informed and make informed decisions in the fast-paced world of trading and investing.