Introduction
Crude Oil Futures (CL) have been trading in a steady downtrend since October 2023 with small bounces here and there. Now Crude oil has tested the multi year support level at $68 per barrel. The probabilities align with the bulls being stronger at this point as the support level has successfully held over eight times. Lets see what the technicals tell us.
Technical Overview
- Trend & Moving Averages:
- The price has remained in a downtrend, consistently making lower highs.
- 50-day SMA (71.35) and 100-day SMA (70.61) remain overhead, acting as dynamic resistance.
- The long-term descending trendline (black) reinforces bearish structure unless broken.
- Support & Resistance Levels:
- Support:
- 67.02 (S1 Pivot) – Immediate minor support.
- 64.28 (S2 Pivot) – A break below here could trigger further selling.
- 60.20 (S3 Pivot) – Major psychological and structural support.
- Resistance:
- 71.10 (Pivot Level) – First key level bulls need to reclaim.
- 73.84 (R1 Pivot) & 75.30 – Strong resistance aligning with the longer-term downtrend.
- 77.92 – 80.66 (R2-R3 Pivots) – Higher resistance levels if bullish continuation follows.
- Support:
- RSI & Momentum Indicators:
- RSI at 47.89 is neutral but rising, suggesting early signs of momentum building.
- A move above 50 RSI would strengthen the bullish case.
Outlook & Trade Considerations
- Bullish Case:
- A break above 71.10 could shift sentiment in favor of buyers, targeting 73.84 – 75.30.
- If oil holds above 67.02, the bounce could gain traction, with upside potential back into the range.
- Bearish Case:
- Failure to clear 71.10 could lead to another rejection, keeping oil in a bearish range.
- A breakdown below 67.02 increases the probability of 64.28 or lower levels being tested.
Outlook: Oil is attempting to stabilize after bouncing from a long-term support zone, but confirmation is needed above key resistance levels before calling a trend reversal.
