Heating Oil futures followed the energy markets higher in Tuesday's session, triggering a technical breakout and closing on the highs. With new sanctions rapidly affecting Iran's domestic economy and potentially cutting off their oil exports, the fundamental backdrop may prove strongly supportive of the uptrend identified in the chart analysis below.
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Sideways to higher trade over the last several sessions has led to the completion of the Pennant chart pattern identified by Autochartist on the 240-minute time frame. The pattern has a sharp resistance trend line which was penetrated on strong momentum going into the close.

Autochartist projects a price target of at least $3.1294 per gallon as a result of this breakout, with a forecast range as high as $3.1706 on sustained buying interest. The intrinsic strength of the move out of this very well-formed pattern encourages the probability of a follow-through to the targets. An escalation of tensions with Iran would only add to the bullish backdrop, making this breakout area a promising entry point for speculators looking to position ahead of the news cycle. Stop-loss orders could be placed beneath the $3.05 support provided by the underside of the pennant.
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