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Jim Hyerczyk

Jim Hyerczyk

Fundamental and technical analyst with 30 years experience.

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With Resistance Falling, Can Oil Hold The Next Support Level?

February WTI Crude Oil

February WTI Crude Oil futures continued to slide last week, rapidly approaching seven-year lows. Traders have put the friendly U.S. Energy Information Administration stockpiles report out of their minds and have now shifted their focus on the global supply glut and the strengthening U.S. Dollar. 

The daily February Crude oil chart indicates the market is in a free-fall. The market is currently trading inside a bearish downtrending channel. The channel indicates that resistance could fall next week from $38.82 to $36.32. This would put pressure on prices. Support is expected to decline from $36.52 to $34.02 throughout the week. 

(Click to enlarge)

The main trend is down according to the week swing chart. The downtrend was reaffirmed when the $40.69 main bottom was taken out last week. This price is new resistance along with a downtrending angle at $41.60.

At the end of the week, February Crude Oil was straddling a downtrending angle at $38.69. Holding above this angle could fuel a short-covering rally.

A sustained move under $38.69 will indicate that the selling is getting stronger. The next target is a downtrending angle at $36.69. The weekly chart will open up even further under this angle with the next likely target $32.69.

With the exception of a weekly closing price reversal bottom (Lower-Low and Higher-Close), the market is expected to continue to move lower from layer-to-layer until…

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