Despite a sharp decline in the crude oil complex to begin the trading week, heating oil futures experienced only a minor retracement and appears to be holding steady at key technical support. Nearby heating oil futures were trading in the middle of Monday’s range after testing the support created by a Rising Wedge chart pattern. The Rising Wedge, illustrated here on the 240-minute candlestick chart, has established a support zone near the $3.10 per gallon price level. The pattern currently measures 8 bars in both Clarity and Uniformity, with an overall Quality of 6 bars. The strength of the trend direction is somewhat muted by the largely drifting price action over the last several weeks while energy products consolidated previous losses, making the direction of the eventual pattern breakout less clear. With crude oil futures slipping to well below the previous pivot range of $100 per barrel so far this week, heating oil futures may be the next to fall below the support. Traders will be watching for a sell-off below the swing low of $3.07 for a sell signal, while a rebound in the crude oil would set the stage for heating oil to rally back to the top end of the Rising Wedge chart pattern near $3.18 per gallon.

Source