Crude oil at US$78.05

Crude oil closed at US$78.05 on Christmas Eve. With this being an extremely cold winter in the northern hemisphere, the price of crude oil might go higher. This would make Darryl Guppy's prediction of a post Christmas high of US$100 closer to reality.

If crude oil breaks the recent high of US$83 achieved on 21 Oct this year, we could expect crude palm oil to follow closely and appreciate in price as well. That would be good news for counters like Golden Agriculture.

Technically, crude oil has been in a correction since peaking on 21 Oct. The short term trendline from 21 Oct has been tested 3 times on 4 Nov, 18 Nov and 1 Dec. Price took a plunge from there and only bottomed on 14 Dec. Closing at US$78.05 means that oil is still in a correction stage. We want to see crude oil closing at US$79.00 or higher in the next few sessions to see this broken. We want to see confirmation in time with price action forming higher lows and higher highs.

The candlesticks formed in the last three sessions for crude oil look like a three white soldiers formation. If the formation follows through, oil is set to move higher sooner rather than later. The longer term trend for crude oil is still up.