Crude Oil futures are down roughly 10% after hitting their highest prices since 2014 only about a month ago, but the slide potentially could be near a stopping point. The /CL contract saw its down move stall near the previous lows from Oct. 7 around 75, which also represents where price topped out in early and mid-July.
This also happens to be near the yearly Linear Regression 50% Channel’s lower level, so traders may be eyeing this general area as a buying opportunity – or it could result in another downside breakout if the bears make a push. Momentum indicators like RSI are not really signaling any kind of change as it continues to fall in tandem with price.
However, /CL closed below the lower Bollinger Band on Wednesday and Friday last week, which typically is viewed as bearish, as prices are violating relatively extreme levels for itself based on standard deviation. Meanwhile, the 21-day Exponential Moving Average has transitioned from rising to falling and the 63-EMA looks noticeably flatter, both of which suggest a weakening uptrend. To the upside, the 21-EMA and the 50-day Simple Moving Average are converging near 79, so this could be a possible stalling point for a rally. For potential support below 75, watch the 200-SMA near 70.
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