OIL — Weekend Analysis
Hello Traders,
Oil continues to show signs of strength following the aggressive recovery from last week’s lows.
From an auction perspective, the market has transitioned from imbalance back into acceptance, with price now trading back near the upper distribution and testing a key resistance area around the prior highs.
The important observation here is not just the rally itself, but how price rallied.
We’ve seen:
- strong acceptance back above prior value
- responsive buying on pullbacks
- higher lows building into resistance
- value migrating higher rather than rejecting lower
That tells us buyers are still in control for now.
However, price is also approaching an important decision point.
The market is currently pressing into overhead resistance near the upper extreme of the recent auction. Historically, this is where one of two things happens:
- Acceptance above resistance → continuation and expansion higher
- Rejection at resistance → rotation back into value
At the moment, I favour continuation unless price begins showing failed acceptance above this area early in the week.
The reason for this is:
- the market repaired prior inefficiency quickly
- buyers defended pullbacks aggressively
- the structure is now compressing beneath highs rather than rejecting from them
Compression beneath resistance is often a sign of absorption, not weakness.
That said, I do not want to blindly chase highs.
The cleaner scenario would be:
- a pullback into value
- responsive buying
- acceptance back above intraday structure
- continuation through the highs
Key things I’ll be watching this week:
- behaviour around the Weekly Opening Range
- whether price can accept above the current highs
- pullback quality into value
- whether value continues migrating higher or stalls
As long as the market remains accepted above the developing value area, the path of least resistance still appears higher.
