Technical Analysis

Crude oil futures down for the 2nd consecutive day

Settle was down over 2% immediately.  

The worth of crude oil is buying and selling at $50.71, down -$zero.89 or 1.71%. That’s off the settle stage of $50.51 or -2.09% on the day, however the shut and present worth is the 2nd down day in a row. 


Previous to the final two days, the worth had moved greater on eight consecutive days. The worth moved from a low of $44.35 to a excessive at $52.78 or 19%.  Not a foul run.   The worth did transfer greater on Friday to $53.28. That top examined the December 14 excessive at $53.27 (see hourly chart under).  Taking out a swing excessive by one cent and failing was sufficient to show the bias round over the past 2 days. 

Trying on the day by day chart above, the rise over the eight day interval is huge, however whenever you examine it to the three month decline from $76.90 to $42.36, the correction greater couldn’t even get to the 38.2% of the transfer at $55.55.    That is not saying so much technically for the bulls.  

The 2 days down places into query the bulls/patrons intention and power  Is the underside in?  Was the rhetoric from Saudi Arabia about getting reserves again in stability imply a transfer again to the $55-$60 space ($59.63 is the midpoint) on the minimal?

Effectively, drilling right down to the hourly chart under, the worth immediately is buying and selling again under the 100 hour MA (blue line) at $51.43. Though the worth did maintain above the $50 stage immediately (low reached $50.38), if the worth stays under the 100 hour MA going ahead, merchants may shift extra to the draw back than the upside.  A break of the 200 hour MA (inexperienced line within the chart under) would enhance the bearish bias, and the story line may be completely different. 

So proper now, the patrons took the worth up 19% over an eight day interval however technically, it was only a minor correction of what was a stronger pattern transfer decrease. That image can change with a rally again above the 100 hour MA at $51.43, however till then, the merchants may purchase on hopes the $50 and the 200 hour MA maintain help, however they need to do it with a cautious eye.  


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