Oil price is bouncing higher for a second day in a row. Price made a low recently at $77.59 and today reached as high as $80.44. As we explained in a previous technical analysis on Oil, a bounce higher towards $81.20 was justified because of the double bottom at $77.60 and because it was short-term oversold. In Ichimoku cloud terms price is challenging key short-term resistance by the tenkan-sen (red line indicator) and the kijun-sen (yellow line indicator) at $80.25. Price remains vulnerable to a move lower towards cloud support as long as it trades below the kijun-sen. The Chikou span (black line indicator) remains above the candlestick pattern (bullish). The tenkan-sen is also very close to crossing below the kijun-sen. This would be another sign of weakness. Bulls need to defend the recent lows at $77.60 in order to hope for a move higher.
