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Oil Working Toward Support

Oil Working Toward Support

Crude Oil WTI NYMEX:CL1!

THE BIG PICTURE: Long term analysis of oil shows a measured move developing which suggests that the down move is not yet complete. Measuring the percentage move of A to B shows a 71% retracement which if projected from point C has the target around the $40 zone. As for the duration of the retracement at 98 bars, confluence shows a window of opportunity around the time frame suggested by point E. The current long term retracement looks to be resolved at some point above the highs obtained at point A. This would fall in line with it being identified as support. Finally, connecting the lows going back to 1986, 1994 and 2002 provides a trend line which if extended shows confluence with the forecasted E point. THE TECHNICAL STANDPOINT: More backing and filling are to be expected in the short term. It appears as if the market will break through 50 and encourage more selling, but just enough to push price into these major levels. If the long term symmetrical move from point A to B is a sign of the duration and extent of the current move then look for a break below the 2009 low to be a fake out.