Crude Magnetized to Channel Resistance
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
-The line off of the 1998 and 2001 lows has proved itself with crude following through on last week’s key reversal.
-The recent rally stalled at channel resistance, the open for the year, and the low of December congestion (circled on chart). The turn lower on Wednesday found low on Thursday near February’s open price. Price wise, oil is locked in a volatile range and it takes a break of 54.21 to set the stage for a rally to a double bottom objective of 58.29. The top of that December congestion at 59.01 reinforces the double bottom target as an important market level. Continuation below 47.36 would leave crude within the well-defined bearish channel and open up the 38.2% absolute retracements of the August 2013 high (112.21) and June 2014 high (107.64) at 41.12 and 42.86.I’ll add that the 38.2% absolute retracement of the May 2011 high (114.80) is 43.85 and the low thus far is 43.56.