Introduction
An unfortunate movement in price for the CL bulls since our last analysis, now trading below the 50-day MA. It was important that bulls held the MA because now that the price has dropped below it, the last support zone is at $75, before the 200 MA at $66.25. If this happened, it would earse 40% of the rally that occurred at the time of the escalation.
CL Futures Trend Analysis
Important Points
Current technicals show:
- The 50-day moving average near $92.30
- The 200-day moving average near $66.25
- Current price trading around $78.60
- Major support zone near $74-$76
One of the most important developments on the chart is how quickly momentum has shifted. The strong bullish momentum that drove crude oil from the mid-$50s toward $105 has now completely faded.
The squeeze momentum indicator is at its lowest since 2020. The interesting part of this drop is that it is slow and low-volatile. This tells us that it is not really a surge in selling pressure but rather a lack of buying interest. This is leading traders who had long positions to slowly lose hope in the possibility of a rally above the previous high at $111, and they start closing out their positions.
Estimated Probabilities for CL Futures
| Scenario | Estimated Probability | Market Interpretation |
|---|---|---|
| Consolidation near $75 support | 45% | Buyers begin defending support after the selloff |
| Continued decline toward $70 | 35% | Sellers maintain control and extend the correction |
| Recovery back above $85 | 20% | Buyers regain momentum and reclaim lost ground |
CL Possible Trades
Support Bounce Trade
The $74-$76 area is becoming the most important level on the chart. If buyers begin defending support and momentum stabilizes, crude oil could attempt a recovery bounce from current levels.
Consolidation Trade Setup
After such an aggressive decline, it would not be surprising to see a period of sideways price action. Markets often need time to absorb large moves before establishing the next directional trend.
Bearish Continuation Trade
The short-term trend remains bearish while price trades below the 50-day moving average. If sellers continue controlling momentum and support fails to hold, the next downside target would likely be the $70 region.
