- CL sentiment shifts bearish.
- Major support level coming into focus.
- Death cross gives even more fuel to the bears.
Crude Oil is now firmly in a downtrend, with the weekly chart printing 6 straight red weeks, and this week looks no different. CL has dropped 25% since September and is approaching a major support zone at $68 per barrel.
Price is now also below the point of control line, which is another indicator showing the bearish momentum. Support at $68 is a major one, and price needs to hold there for bulls to have any hope. This zone has held the price above it for the entire year and is the most apparent support on the chart. A drop below this level could see CL drop toward the $50 level, but this will need to be spurred on by geopolitical and fundamental factors.
There has been a death cross on CL, with the 50 MA moving below the 100 MA. The downward-sloping channel shows us the consistency of lower lows and lower highs. Price is still not oversold, and it looks like there is still a lot of room to go to the downside.
Levels To Watch
The $68 level is the clearest and most obvious to watch. At the moment, taking any longs would be an attempt to catch a falling knife, and bulls might be better off just waiting it out before they see what happens at the $68 levels. Bears are sitting pretty as sentiment has shifted to bearish.