The talk of the town may be on higher bond yields today but the oil chart is one that is worth keeping an eye out for as well.
WTI crude is trading up to $85 today and that is the highest since the October and November highs last year. That is seeing buyers run into a key resistance region, staying in search of a fifth straight week of gains.
As much as there is plenty of talk of tighter supply recently, the charts do say that we are perhaps running it close to overbought conditions and there might be some technical exhaustion if the above resistance region holds.
I've been an advocate of higher oil prices but this is pretty much a 'make or break' point for the latest run.
Even the Brent crude chart is hinting at a similar kind of technical price action:
Anyway, going back to WTI crude, any retracement from here could course correct towards $80 or perhaps even the 100-day moving average (purple line) near $76. But considering the fundamental backdrop, I'd argue that they will prove to be good dip buying levels if and when we get there.
The big caveat of course remains China, but the same can be said for many other asset classes too.
That said, if buyers can crack the above resistance region, there's little in the way of stopping oil from a potential rally to $95 or even $100 - at least from a technical perspective. I doubt we will see such a major extension that quickly after four weeks of gains but stranger things have happened in markets before.