Commodities Countdown

Where Is Crude Oil ($WTIC) Headed?

Greg Schnell

Greg Schnell

Chief Technical Analyst, Osprey Strategic

Crude Oil ($WTIC) continues to drift down. After pushing up near $50 in mid-May, it took 3 weeks to finally break through, surging to $51. That breakout failed to hold and we have been grinding lower since the June 9th closing high. The numerous tests of the blue channel line have worked us up against the red downtrend. We are at a decision point. Some technically important levels have built up.

  • The 200 DMA is at $41.
  • Looking left, the market spent two months bouncing off the $43 level.
  • The $44.42 level is our low since the June top.
  • A break through the red downtrend line to the topside puts the 50 DMA in play at $48.
  • The horizontal resistance sits at $50. 


Looking at the MACD, we are below zero so that is a little bearish and we don't have any divergence setting up on the daily chart. Let's move over to the 60-minute chart of USO to get the intraday detail.

I have placed the Fibonacci lines on the chart. We currently sit right on the 38.2 % retracement. The 100 period MA has been a good support/resistance line. The volume is stable so no real clues there. The MACD has rising lows and declining highs. Whichever way the break occurs on the MACD, suggests the next move. 

The bottom line for me is there is not enough divergence to expect this to be the final low. Perhaps we'll move down to the 50% fib level. However, the market doesn't seem to be impulsing down so this move appears corrective. We'll continue to watch crude through the Commodities Countdown webinars. The Commodities Countdown Webinar 2016-07-21 is the next one, so I hope you can join me. Click on the link to register. If not, you can check the webinar archives found here. StockCharts Webinar archives. You can also follow me on twitter @Schnellinvestor and LinkedIn. If you would like to receive this series in your email, please click on the subscribe button below.

Good trading,
Greg Schnell, CMT, MFTA

Greg Schnell
About the author: , CMT, MFTA is Chief Technical Analyst at Osprey Strategic specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the CMT Association and the International Federation of Technical Analysts (IFTA). Learn More