Oil's Double Bottom
19 December 2023
Brent oil's recent market movements have been quite noteworthy. Over the past two weeks, it has formed a double bottom pattern, indicated by the orange color on the chart. The significant development here is the recent breakout above the formation's neckline, marked with a blue line. This development introduces a short-term buying opportunity.
However, it's crucial to contextualize this bullish signal within the broader market trend. Brent is currently trading within a descending channel pattern, outlined by the black lines. This larger pattern suggests that, despite recent gains, the mid to long-term sentiment for Brent remains bearish. A decisive close above the upper boundary of this descending channel would be required to establish a more robust buy signal. As of now, such a breakout seems unlikely, limiting the potential for sustained bullish momentum.