Tuesday's Market Minute: Big Swings In Crude Oil As Futures Near Resistance

It’s been a wild ride for crude oil futures traders in recent weeks, with the contract falling more than -23% from its intraday highs on April 12 to the lows on May 4. The intraday move also took oil below the previous lows from mid-March, although bulls managed to squeeze out a higher close. The /CL contract also saw a big bounce off these lows and is now up about 13% from that intraday nadir near 63.64. Momentum is also showing some matching improvement with price. The RSI was oversold during the lows from mid-March, yet managed to stay above that threshold of 30 – although it is still below the 50 midline that denotes bullish vs bearish momentum. 

However, the overall trend still seems to favor the bears. A downward trendline beginning around mid-July and traveling across the highs is still in play. Price is trading below several commonly followed moving averages, such as the 21-, 63-, and 252-day Exponential Moving Averages. All three of these moving averages also are sloping downward, which tends to mirror the prevailing direction of price. 

Price is close to the 73 mark this morning, which is an area that technicians have likely been keeping an eye on as it represents a point where price bottomed out twice in January and February. This old support now is resistance to watch, and the 21-EMA near 74.60 is the next hurdle to watch. There’s also potential support near the 70 mark as it represents the lows from December. Beyond that, look for the yearly Linear Regression line (a line of best fit based on closing prices that indicates fair value) near 67.40.

Image sourced from Shutterstock

This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.