Oil has moved up nicely since its late May low, but is this just a countertrend rally ahead of a more significant decline, the beginning of a move to much higher prices or neither? My strong suspicion is the latter of the three. Fundamental analysts put the upper end of oil's fair value range around $85. Many elliott wave technicians are calling for a strong wave c of B decline to below $50 before oil can move higher. The seasonal pattern for oil shows a top coming mid-September.
My take on the picture is that unless oil can punch through the median line and channel line resistance as well as the May high by late August well ahead of an expected top in September, oil is probably in the X wave of a combination flat correction. The low in May was probably wave W and wave Y, either a triangle or a zigzag is yet to come. At worst oil should most likely just retest the May low this fall as opposed to much lower levels.
Based on this view traders may want to consider taking profits at an approach to or retest of the May high and wait for a new long entry on a retest of the May low.