On the weekly chart Crude oil had formed an ‘engulfing bull’ in the penultimate week. As a follow through of the bullish candle, crude oil shot up in the last week. It has surpassed the upper end of the rising channel as well as a crucial falling trendline. In the last session the trendline has been retested. Crude oil is unlikely to fall below the trendline on a closing basis. The daily MACD has taken support at the lower end of the channel. The commodity is trading above the short term as well as the medium term moving averages viz 21-50 DEMA and 21-50 WEMA. Hence there is a high probability that the rally will continue and will take the oil to previous highs ie $82.97 - $87.15. In the south, the swing high of $78 will act as key support.
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