Where is The Price of Oil Headed?

The price of crude oil is at a crucial crossroads.  This crossroads occurs on a chart. The price of crude oil has recovered since the lows of around $35.00 a barrel back in December.  The prices have actually rose quickly and almost directly to the level of $73.90 At this crucial point the price hit some strong resistance.  After a quick retracement the price has risen to the $75.00 level.  In the last few days the price has dropped again. This means around the $75.00 level there is very strong resistance.  This means that in the short to mid term the price of crude oil will continue to sink.  Since no reversal formation has occurred, just a test of resistance (which failed) there is no way to estimate how far back the prices will go.  The 200 day moving average provides huge support at around $60.00 so I do not believe that prices will fall directly through this level.  The PPO has diverged negatively however which tends to signal a larger reversal in trend.  In the short term, I would be short on the crude oil.  In the long term the upcoming pullback is a great time to buy.  Depending on what options can be had now might be a great time to buy as well.  The biggest thing to watch is the next time that the price tests it’s resistance at $75.00.  Any break over $80.00 is a very bullish sign (which should be confirmed by other signals).

On the chart you can see the clearly labeled resistance points that have occurred.

If you would like to read about the rest of the stock amrket and where prices will be headed over the next 6 months check out this article.  And for those of you who are worried about a “fake” bear market rally instead of a true bull rally, you need to read this piece explaining why in any market there is money to be made.

The author is not responsible for any decision made based on this article.  Investing is very risky and requires research.  It should only be done with money that you can afford to lose.