Crude Oil Technical Update - Bearish Triangle May Be Forming

The new front month November 14 crude oil contract fell lower for a fourth consecutive day on Monday losing .78 to settle at 90.87.

A triangle pattern may be forming in the November contract with point 3 set at yesterday’s 90.41 low.  A rally back higher to upper triangle trend line resistance currently near 93.90-94.00 is now needed to complete the 4th and final point of the triangle.  Point 4 also coincides with the 40 day moving average trading at the  same level.

Triangles have a 75% chance of being a continuation rather than a reversal pattern.  In this case, the continuation would be down if the triangle forms as predicted.

A breakout above 94.00 would negate the triangle pattern and turn the longer term trend back higher.

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