Crude Oil Technical Update - Small Triangle Forming On The October 14 Contract

After falling to a new 7-month low last Thursday, the October 14 crude oil contract has spent the following two days coiling in a sideways range.

This sideways range has  formed a very small triangle which should be followed by a breakout over the next few days of trade.  The only question now is in what direction?

The October contract on Monday held in a fairly narrow .95 intraday trading  range closing the session down .30 at 93.35.

Triangle support is near 93.00 with resistance at 94.00.  Odds favor (75%) of this triangle being a continuation pattern lower.  A downside breakout from the triangle would turn the 91.00 area into the downside objective for completion.  91.26 is the current 2014 spot contract low for crude oil.

If the breakout from the triangle instead comes to the upside above 94.00 and the 10 day moving average at 94.10, 96.00 will become the upside objective for the triangle pattern.  It would also likely indicate a low has formed in the market.

Technical Indicators:  Moving Average Alignment – Neutral-Bearish
                                         Long Term Trend Following Index – Bearish
                                         Short Term Trend Following Index - Bearish