Technical Analysis – March 12, 2025
Crude oil futures (CL) have been on a steady downtrend, recently testing a major yearly support zone near $65-$67. Buyers are attempting to defend this level. Could this be the start of a reversal, or is there more downside ahead? Let’s analyze the chart.
Price Action & Key Levels
- Support Zone: The $65-$67 region has acted as strong support, as seen in previous price action. The market recently bounced off this level.
- Resistance Levels: The 50-day SMA ($72.14) and 100-day SMA ($70.83) are immediate overhead resistance. Additionally, a long-term descending trendline near $75.30 has capped upside moves multiple times.
Technical Indicators
- RSI (14): The RSI is hovering around 39.89, which is close to oversold conditions. A slight uptick in momentum could indicate early bullish divergence if price holds support.
- Moving Averages: Both the 50-day and 100-day SMAs are sloping downward, confirming a bearish trend. The market needs to reclaim these levels for a sustained reversal.
- Candlestick Formation: Recent price action shows that bulls are still holding strong, they need to because if price drops below the support zone, panic selling could set in.
Bull & Bear Case Scenarios
Bullish Case:
- Strong support at $65-$67 holds, leading to a bounce.
- RSI recovers from oversold conditions, confirming a momentum shift.
- A break above the 50-day SMA ($72.14) could push prices toward $75.30, a major trendline resistance.
Bearish Case:
- Failure to hold $65 would likely lead to further selling pressure.
- Below $65, the next downside targets are $60-$62, aligning with previous support levels.
- Moving averages continue acting as resistance, preventing any sustained upside.
Final Thoughts & Trade Outlook
- Short-Term (1-2 Weeks): Neutral to Slightly Bullish – Expect a potential bounce off support, but watch for confirmation above $70.
- Medium-Term (1-2 Months): Bearish Unless $72.14 is Reclaimed – The trend remains downward unless price decisively breaks above key moving averages.
- Long-Term (3+ Months): Neutral to Bearish – The downtrend remains intact, and failure to reclaim $75.30 could keep the market under pressure.
Key Takeaway: If crude oil holds above $65, a short-term rebound is possible. However, sustained upside will depend on breaking key resistance at $72.14-$75.30. If bears push the price below $65, expect further declines toward $60-$62.
Possible Trade Setups
📈 Bullish Setup:
- Buy near $66-$67, with a stop below $64.50.
- First target $70, second target $72.50.
📉 Bearish Setup:
- Short on a breakdown below $65, targeting $62-$60.
- Stop-loss above $68 to limit risk.
