The February 15 crude oil traded slightly higher on Thursday consolidating above recent low support following heavy selling earlier in the week.
The February contract bottomed out at a 46.83 low on Wednesday coming just above 16-year trend line support at the 45.00-46.00 level. This trend line will likely be tested again over the next few days of trade.
If trend line support holds, a near and possibly long term low for the market could be set.
But if support doesn’t hold and the February contract instead closes under 45.00, the primary trend will remain down with the next longer term support becoming the 32.40 low from December 2008.
Bottom line - A very important technical test for the crude oil market in upcoming trade.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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