It is still way too early to call a low in the crude oil market but it did hold above an important area of support in Tuesday’s trade.
The support is a 16-year trend line on the weekly crude oil chart that is near the 45.00 level basis the spot February 15 contract.
The February contract did breakdown to a 44.20 low in early trade on Tuesday briefly trading under trend line support. But late day buying rallied the market back higher with the February contract closing the day at 45.89, down .18.
If the crude oil market can hold over support at the mid-40.00 level over the upcoming weeks of trade, a long term low could be set in the market. Past lows above the weekly chart trend line have taken several weeks to form so patience is warranted.
If trend line support fails and the market continues lower, 40.00 will become the next level of support followed by the December 2008 low at 32.40.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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