In our previous analysis on Oil, we identified a bullish pattern of an inverted Head&Shoulder. Our target was $53.50 – $54 and we got there. What now? There are some indications that a pullback is imminent.

In the 4 hour chart, as shown above, I see the RSI diverging and MACD that has already crossed over to the downside. These are simple warnings for bulls. When price breaks below $53.75 we will have confirmation of a bearish signal that should push price towards $52 – $51.50. So I expect prices to roll over from current levels and fall towards the upward sloping blue trend line and the Ichimoku cloud support.

On a weekly basis, Oil prices have broken above the weekly Kumo (cloud) and above the black long-term downward sloping trend line resistance. I could see a backtest of this broken resistance and then resumption of the uptrend in oil. So now it is time to be neutral or bearish oil looking for a buying the pullback opportunity around $52.