A rally higher by the February 15 crude oil contract from a 16-year weekly chart trend line support reached earlier in the week hit a wall of selling in Thursday’s session.
The contract traded up to a 51.27 morning high but by the end of the day had traded down to a 46.07 low settling at 46.25, down 2.23 (4.6%).
Daily settle back under the 10 day moving average is a bearish indicator heading into today’s trade. The 10 day average at 47.75 is the first area of resistance followed by yesterday’s 51.27 high.
Key downside support remains the 16-year weekly chart trend line at the 45.00 level extending down to the 44.20 low set on Tuesday. If this support continues to hold in upcoming trade, it could mark a long term low from crude oil.
If trend line support doesn’t hold, the primary trend will remain down with the next levels of support being 40.00 and the 32.40 low set in December 2008.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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