A breakout above 10 day moving average resistance on Friday by the January 15 crude oil contract was followed by a sell off back lower in Monday’s trade.
But while the January contract lost .78 (1%) settling at 75.78, it closed above the 10 day moving average for a second day which could be the beginning of a market low.
With 10 day moving average support holding on Monday, the near term trend remains up with Monday’s 77.02 high being the first area of resistance followed by last Friday’s 77.83 high extending up to 78.64.
A breakout above 78.64 would turn 80.00 into the next upside resistance which coincides with the 40 day moving average at 80.50. A rally above the 40 day average is needed to turn the longer term trend back higher.
A drop back under the 10 day moving average at 75.60 today would turn the near term trend back down with following support at 75.00 and the 73.22 low set two weeks ago.
Technical Indicators: Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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