Over the past three weeks, May crude oil has been trading within a 4714-to-5407 balance range. However, over the past five days, the daily ranges have been gradually shrinking, essentially getting squeezed into a triangle formation. Many times when a volatile market such as crude oil breaks out from a triangle formation, a significant move follows.
If the market breaks the triangle formation to the upside, the 5407-balance range becomes the target.
If the market breaks the triangle formation to the downside, 4989 may become support. With acceptance below 4989, the market may test the 4811 bar chart reference.