Since mid-April 2024, light crude oil futures have been following a red resistance line. There have been touchpoints in April 2024, January 2025, and mid-June 2025. Recently, prices surpassed this resistance, which might impact stop losses for early short sellers, trapping those who bought on the breakout. From early April to early June 2025, prices fluctuated between $52 and $65. A volume profile in this period highlights the value area where institutional and algorithmic trades take place. On May 30, the Value Area Low (VAL) around $55 presented a buying opportunity.

Volume Profile Strategy

Traders familiar with volume profile dynamics know that professional buyers enter at the VAL. They tend to take partial profits near the Point of Control (POC) or Value Area High, around $63.35, and may aim for higher price levels if momentum supports it. Currently, with crude oil showing only a small pullback from the June 12 high and buyers coming back in, there is a chance for a price test of resistance. A breakout could lead prices toward $80, a significant round number. This is not a prediction but a point of insight, highlighting the use of the Volume Profile in the tradeCompass methodology. This information is for educational purposes and should be regarded as strategic insight. Always trade at your own risk. ForexLive.com will rebrand to investingLive.com by the end of summer. In the weeks following the May 30 bounce from the $55 VAL, price movements have remained stable. Each pullback has become shallower, while upward movements have shown clearer direction. We have noted well-defined buyer initiative—sharp, low-volatility candles aligning with higher trading volume after inventory or macroeconomic data releases. This signals a shift in intentions. The market appears to be rejecting lower prices more energetically than it punishes long positions. It suggests that there is a formation of structure below current prices rather than above. In such scenarios, we watch to see if aggressive trading is rewarded. This means monitoring how intraday movements play out at the extremes of the value zone. For instance, if prices break above $63.35 with increasing volume and confirm the absorption of weaker hands, what seemed like a minor level might extend to untouched liquidity located above recent highs.

Market Behavior and Strategy

Looking back at January’s rejection just above the resistance trendline, we observed aggressive volume sellers stepping in after the test. This was not the case on June 12. Instead, we saw a brief stall, with lower wicks being defended and a slow return to the value area. This suggests that profit-taking was occurring rather than new institutional short positions. We don’t base trades solely on one tool. However, if volume decreases during downtrends while remaining steady or increasing during upward movements, it makes sense to take partial positions. This is especially true when upward movements start within or just above high-volume nodes. The $80 target may seem distant now, but we can’t overlook how markets behave around round numbers. Major psychological levels often act like magnets, pulling prices towards them if previous resistance does not generate sufficient pushback. More importantly, we need to observe whether the area around $63.35 becomes a base or a ceiling. The price’s acceptance above or below this level will significantly influence short-term strategies. From our perspective, small to medium trades that align with both market structure and behavior have been effective, assuming sensible stop-loss measures. If prices approach previous highs with low volatility and shallow retracements, there may be value in holding positions longer. Understanding how volume clusters form around key resistance levels helps us manage risk. When we enter value areas with known historical points of control, it shows us where participants previously acted decisively. If similar patterns emerge again, we can better gauge commitment. In our recent strategy sessions, we have discussed holding partial long positions while observing subtle shifts around the prior resistance near $66. If upward momentum slows, or if we see volume spikes without corresponding price increases, it may be time to exit. Conversely, consistent expansion beyond that level would encourage us to slightly broaden our targets and adjust stops using volume levels as safety rails. We remain focused on the balance between initiative and responsiveness—not just in terms of magnitude, but also how prices react under pressure. Reaction time is critical. When thin price movements encounter strong absorption, a single sharp candle could invalidate the setup. But when pullbacks are followed by slow returns to acceptance, that indicates a potential for continued rotational movement. For now, we are observing how the price interacts with the red trendline—not to confirm, but to analyze the reaction. The behavior around that point will provide more insights than any prediction. Create your live VT Markets account and start trading now.

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