Followers on Twitter know that I have been bullish oil since the breakthrough at the 38.2% Fib retracement and the formation of an inverse head and shoulders pattern. The chart suggests to me that we will test at least the 78.6% Fib line, which also aligns with the distance from the head to neckline of the IHS.
That said, I expect a pause or pullback here at the $64 level. The crude price has had a strong, almost linear move, and now meets resistance at the 61.8% Fib retracement and an area with significant market memory dating back to January of 2018. I’d lighten up longs here until crude definitively breaks through the $64.50-$65 level, at which point I’d set a price target of ~$70.