Oil Climbs Higher After Escaping From the Flag Formation

Oil is looking to end this week on the positive side with the possibility of a very handsome buy signal. This week, we had two important events on the chart, which significantly increased the chances for a further rise.

First of all, the price created a flag (red lines), which is a trend continuation pattern. The flag ended yesterday with a breakout to the upside, which is totally in line with the characteristic of this formation.

The second event is the price bouncing (yellow) off the big channel down pattern (green), which proved the earlier breakout and confirmed the mid-term bullish sentiment.

Both of those events are actually enough for us to be bullish on oil and look forward to a further rise. The possibility of the sentiment would be cancelled should the price come back inside of the channel down formation, but chances of that happening are now rather limited.