Thursday's Market Minute: Range-Bound Crude Oil Falters At Resistance

Crude oil bulls hoping for an upside breakout yesterday had their hopes dashed as the rally fizzled at the previous highs near 82.50. The futures are establishing a range between the yearly lows near 70 and the recent highs, marking a period of sideways price action after much of the year has been in a downtrend.

The /CL contract has fallen roughly -38% since its yearly highs around 130 in February, but shows a lack of conviction in either direction right now. Momentum looks to be favoring the bulls though, as the RSI is above the 50 midline and is making new relative highs with price.

The near-term upside point to watch is the 63-day Exponential Moving Average just above 80, and a close above this mark would be crucial for breaking out beyond what is now a double-top forming near 82.50 after yesterday’s drop. The 80 level also is significant because it’s also near the yearly Linear Regression Line, which is a line of best fit based on closing prices that represents a notion of fair value and can serve as support/resistance.

Beyond that, there’s the 252-EMA near 86 and another double-top representing the peaks from October and November near 93. To the downside, watch the 21-EMA near 78, then the trendline starting with the yearly lows and going across the lows from early January which comes in around 75. Beyond that, look to the yearly lows near 70.

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