The November 14 crude oil contract made a strong recovery on Thursday following an early break under 80.00 support. The contract rallied higher from a 79.78 morning low to close the day up .92 settling at 82.70.
It is too early to tell if the market has bottomed but recent panic selling is the type of price action seen near a market low.
The 10 day moving average at 85.45 today will be primary resistance in upcoming trade. A breakout above the 10 day average would turn the near term trend back higher possibly indicating a market low has been set.
If 10 day moving average resistance holds, the primary trend will remain down with 82.45-82.50 being the first area of support followed by Thursday’s 79.78 low.
The next few days will be an important test of underlying strength in the market. Failure to extend yesterday’s bullish reversal will likely lead to new price lows.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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