- A powerful Dragonfly Doji was formed during yesterday’s volatile session.
- CL prices bounce off of the Parabolic curve mentioned last Friday.
- What to expect next?
The Parabolic Curve Acts as a Support
In yesterday’s volatile session, CL dropped over 6% right into the support zone and the parabolic curve we mentioned in Friday’s technical analysis. The price quickly reversed, ending flat on the day and painting a Dragonfly Doji.
The long lower shadow suggests that there was aggressive selling during the period, but since the price closed near the open, buyers could absorb the selling pressure and push the price back up. The dragonfly Doji could lead to higher CL prices; however, today’s session is important in that if we see a red candle that closes towards the low of the Doji ($76.25), it could mean more downside is on the horizon.
It may take a few candles to confirm the Dragonfly Doji as a market low; for example, we could see a few smaller candles for the next few days before we see prices rally. It’s not vital that we get a green candle today to confirm the move. As long as it comes sooner than later and we do not see a big red candle today.
What to Expect Next?
We still maintain the same outlook from last week Friday. It’s highly recommended to look at that article to keep up to date with where we are regarding the CL analysis.
The support at $77 proved itself yesterday. If prices rally in the next few days, a short-term target of $81,79 is on the cards, and a longer-term target is around the top of the parabolic channel. We need some time, though, to see if the Dragonfly Doji confirms.