Crude Oil Technical Update - Triangle Appears To Be Forming In The Market

Today’s expiring October 14 crude oil contract sold off early last week, rallied back higher by mid-week

For the week, the October 14 lost .42 settling Friday at 92.41.

A sideways triangle pattern appears to be forming in the market with the first 2 of 4 points in place.  This pattern which will be shown tomorrow on the November 14 chart would likely be a bearish continuation lower if it does form the final two points.

For today’s trade, 94.95-95.00 which is both the 40 day moving average as well as the upper triangle trend line is primary resistance if reached.  A breakout above the 40 day average would negate the triangle pattern and turn the longer term trend back higher.

Support for today is the lower triangle trend line currently near 91.00 followed by the 90.43 weekly low.
In order for the triangle to form, a sell off first back toward lower trend line support at 91.00 would complete point 3.  This would need to be followed by a rally back higher to the upper trend line completing point 4.  This triangle pattern has a way to go before completion but will be interesting to see if does in fact form in upcoming trade.

Friday’s COT report showed funds long 297,281 crude oil contracts, down 2,701 from the previous week.  Funds were record long crude oil on the June high but have been liquidating as the market sinks to new 2014 lows.

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