Crude Oil Prices Falling Again, Nearing 1st Support

For the better part of the past two months, Crude Oil has been mired in a downtrend, falling roughly 15% from the August highs. And with equities holding up pretty well, it’s concerning to see Crude Oil prices falling like this.

Well, concerning for Crude Oil investors that is. Why? Well if equities start to pull in further, the fall in crude could accelerate. Something to consider as we monitor intermarket relationships and price developments over the next week or two.

 Back on October 15th, I captured the early stages of this bearish setup, penning “Are Crude Oil Prices Setting Up For A Fall Bottom.”  In that post I argued that the volatile commodity was ready to decend further, perhaps into the first part of November.  There were 4 key support levels mentioned in that piece, and two that caught my eye:

1. The 200 day moving average (dma) around $98
2. The 15 month uptrend line around $92
3. The 3+ year trend line from the 2010 lows around $86
4. The lower channel support around $77.

While the 200 dma holds some psychological weight, I’m more concerned about the recent trend lines at $92, and perhaps $86.

Flash forward to the current price action and you’ll notice that Crude Oil is nearing the rising uptrend around $92 to $93. As well, the black gold is finishing bar 7 of a weekly 9 sell setup. This has me looking for a new low next week or the week after, as Crude Oil tries to find that early November bottom. If $92 doesn’t hold, then I’d look for sub $90, with $86-$88 being the next objective. So perhaps time and price will align with Crude Oil prices falling into that early November bottom.

The charts below are from my October 15 post and are simply updated with additional price bars. Note that they are EOD charts and Crude Oil is down another 1.5% intraday (as I write), now trading under $95.  Trade safe.

Crude Oil Prices Falling – Daily Chart

Crude Oil – Weekly Chart

Twitter:  @andrewnyquist

No position in any of the mentioned securities at the time of publication.  Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.