A technical review of the WTI crude oil daily chart going into the weekend shows some very interesting price action.
Crude oil traded in a ‘channel’ from November through the middle of February. At this time it broke above the channel until last week when price broke the upward trend line and fell back into the channel.
Shortly after breaking the trend line, price formed a ‘morning star’ formation and bumped up against the backside of the trend line, only to fail and void the 3 day formation. The last two days price pierced the upper level of the channel and failed to close above each time, once again reinforcing the resistance level.
If price crosses below the T3 Tilson line then the blue dotted fuel gauge begins to turn downward again.
Bottom Line: The technicals suggest crude oil can continue to fall, and if the fundamentals continue to suggest a soft patch is nearing, traders may find price attempting to move back towards the bottom of the range. Welcome news for short traders of crude oil and most definitely for those of us without an electrical vehicle sitting the garage.