Oil bulls need a follow through for this bullish signal to get validated

Last week I closed my $USO short position as I said on twitter because price has reached the 61.8% Fibonacci retracement of the entire rise from the low at the end of 2019 to the high back in April.

 

Oil has formed a bullish reversal candlestick pattern called hammer.

Price remains below the weekly cloud and I would not get too comfortable with a long position for too long. However this bullish pattern implies more upside so we could see a test of the cloud resistance. This week is very crucial to the validation of the pattern. Bulls need a strong week higher as a follow through to confirm the bullish hammer candlestick pattern.

Major support is last week’s lows. Breaking below it will be a very bad sign for Oil price.