After a volatile but generally rising trend in the crude oil complex, US Crude Oil futures have come within a stone's throw of the long standing $100 a barrel resistance level. This level proved a significant barrier for the last rally, which carried the market slightly above it before cascading back to the low 90's in a broad market correction.

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That correction appears to have been short-lived, however. The entire crude oil complex has bounced well from the swing lows, with both Brent and US Crude recovering most of the losses and holding firm near the high end of their recent ranges.

WTI Crude Oil futures closed last week's trading session less than 50 cents below the $100 mark, having gained several dollars from Monday's opening price in fairly choppy price action. That overall move has formed into a Flag chart pattern, shown here on the longer term 240-minute time interval.

The opening price for Monday's session will be about mid-range of the flag, giving a wide swing radius for the price to establish direction ahead of an possible breakout.

With the recurring bouts of strong buying on each substantial price drop in this market, there is a slight bias for the price to eventually push out of the upper boundary of the flag for a sustained rally above the $100 barrier. The short run however may hold a quick retest of the support provided near $98.75 per barrel to continue the back-and-forth pattern inside the formation.

If the support level holds, it may create a solid entry position for anticipating the next rally, with substantial price increase possible if the upside breakout materializes. A failure of the support provided by the Flag chart pattern would likewise indicate a short term bearish development, with some downward pressure in the market to retest the lows established during last week's brief pullbacks.

Even with a sustained rally above the $100 level, the pattern will require a move above $102 per barrel to trigger the Flag breakout and complete the pattern. If this does occur, it would imply a very strong trend is being established, and may challenge the previous highs of 2011

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