Crude oil has been on a short term bull run from the lows at around 39.30 but let´s not forget that we are still inside a mid-long term bear market structure (blue channel) that price is testing at the moment.
42.78 is a previous high volume area where sellers are going to be placed and longs are going to start taking profit. This will have one single effect on price: immediate bearishness. This is not a short signal by our standards, but it´s, in fact, an area that we had flagged as a possible reversal zone.
If we look at the blue bear structure we can see that price has clearly formed a bear flag but for this flag to be active price not only has to break with it but it also has to break with the bull/bear zone of 41.70 – 41.90. In any case, we remain bearish inside this structure.
