Everyone is currently bullish on commodities and especially Crude oil. Is the trade getting crowded?
Looking back in the chart, we can clearly see a major previous top from 2018 taking place in October. Also, the ascending wedge is a bearish formation, but needs confirmation with the pattern breaking through the lower trendline from march 2020.
As for now, both RSI and stochastics are showing bearish divergences not confirming the new high in price.
Should price reach the $86 level again, I expect people to secure some gains. Similarly, should we break below $81-ish, it could be a potential shorting opportunity to scale in while putting the stop at $83 and the trendline.
It is hard calling for a bearish development in oil prices when the demand is so huge, but technicals are technicals, a pullback in any case, is warranted, even if it does not break the trend.