The crude oil market began the new week on a down note losing 4.7% during Monday’s session.
The spot February 15 contract settled at 46.07 on Monday holding just above 16-year trend line support on the weekly chart at 45.00-46.00. Whether or not this trend line support can hold in upcoming trade will be a key technical signal for the market.
If support holds, the bullish series of higher lows that has been in place since 1998 will remain intact.
Past lows above this trend line have taken several weeks to form. The last time this trend line support was reached was in December 2008 when the market bottomed out at a 32.40 low. It took nearly 12 weeks of consolidative, sideways trade above the trend line before the market reversed back higher.
If 45.00-46.00 support does not hold, the primary trend will remain down with the 32.40 December 2008 low then becoming the next downside objective.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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