Heating Oil futures surged higher in tandem with the crude oil markets in Thursday's session as short-covering ahead of the weekend appears to be pushing sellers out in droves. Mounting tensions between Iran and the West continue driving the charts into solidly bullish technical formations. Autochartist has identified Heating Oil futures as a strong candidate for an upside breakout following the day's move.
The market has twisted upwards to test the upper edge of a Rising Wedge chart pattern, shown here on the 240-minute time frame. After an earlier retest of this resistance level near $3.25 per gallon, the anticipated correction proved to be very shallow. The market hooked back higher far above the wedge support at at $3.10 per gallon to indicate increasing strength and acceleration of the uptrend.
Thursday's close implies a potential breakout above the wedge. This will register as a breakout on shorter-term and longer term time frames as the price pushes to new highs and opens the door for a possible spike to a much higher price level. Barring a reversal back into the edge in Friday's trade, the completion of this pattern appears to be in the form of a runaway rally following the topside breakout.
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