In our previous analysis regarding Crude Oil we warned that Oil was near important resistance levels and bulls should be very cautious as a reversal was very possible. Oil prices have broken the upward sloping channel that were in for more than one month and this was our sell signal. Oil price support was at 103.50 and resistance at 105. Our subscribers were notified on time that we opened a short position expecting this trend reversal.
Oil price has not only broken the upward sloping channel but has also broken the 4-hour chart Ichimoku cloud support that confirms the trend change I was expecting. Oil price is now in a downtrend with lower lows and lower highs. Oil price is inside a downward sloping channel and the first short-term support we can find at the 50% Fibonacci retracement at 101.55.
My general view is shown in the daily chart above. Oil price is expected to move towards the daily Ichimoku cloud near $101 or even toward $100 where I have projected the lower triangle boundaries. Breaking below these levels will be a sign of extreme weakness that could possibly push price much lower. For now I plan to take profits between $100-$101 price range where support is found.
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