crude oil futures (CL)
Market Overview Technical Analysis

Parabolic Curve Retest and Inverse Head & Shoulders on Crude Oil (CL) Futures Chart

  • The parabolic curve on the CL chart continues to act as support.
  • A Potential inverse Head & Shoulders formation on the 4-Hourly time frame.
  • Point of control volume profile acting as resistance.

Daily Chart Recap

From last week’s multiple tests of the parabolic curve, CL is repeating the same tests once more, with the price hovering just below the Parabola ($87.23). One important fact to note about the Parabola is that it cannot hold forever due to the curve that eventually becomes too steep for the price to follow. However, the Parabola is currently holding, and the price tantalizingly got close to the first target of $90, which was mentioned in our analysis last week.

CL Daily Chart

Potential Inverse H&S Formation

We know the Parabola is giving the chart a bullish bias for now as long as it holds. The MACD is also showing no signs of divergence to worry about. This means the buying pressure is still significant on the second impulse move.

A few things to note; The second target of $93.64 is the high of the original impulse move, where we saw CL rally from $76.22 (low of the Parabola). If the price does rally to $93.64, it could be the catalyst for a new impulse move where CL could see higher prices toward the elusive $100 mark. On the daily chart, this could be a break above an inverse Head and shoulders. We haven’t seen the price touch the $100 level since July. However, if the parabolic curve does not hold, then prices could slip toward the minor support of $83.

CL Daily Chart

Volume Profile On Hourly

An interesting development has occurred on the hourly chart. If we apply a fixed range volume profile from the low of the parabolic curve, we can see that the highest trade volume (point of control) is at $88.27, and for now, it is acting as a resistance. We will have to wait and see if the same will happen once the price rallies again to test the point of control line.