US Crude Oil futures traded in a narrow range during Thursday's session, consolidating after the large gains posted on Wednesday's big up day in the markets. The price action has been identified by Autochartist's emerging pattern scanner as a Pennant formation, possibly still in the early stages of development.
This Pennant chart pattern has very clearly defined support and resistance levels with a wide inside range to trade until a directional breakout occurs. The pattern's Initial Trend reading ranks a full 10 bars, with the overall quality of scoring 7 bars after the successful retest of support at the $99.00 per barrel level. This bodes well for a bounce back to the resistance offered near $102.50 per barrel.
A breach of the Wednesday low would violate the support level and trigger a breakout signal for a move lower. Meanwhile, the anticipated resumption of range-bound trading inside the pennant provides a $3 window for short-term swing trading, with stop-loss orders placed outside the pattern's trend line boundaries. A rally above the $103.00 per barrel level is needed to initiate a breakout to the upside. .
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