WTI crude oil had traded above its 200-hour moving average since breaking higher on October 12. Today, that support finally cracked. The price fell below the rising 200-hour moving average at $100.08 and the psychologically important $100 level, reaching a session low of $99.79.
Those breaks gave sellers two reasons to push lower. However, the follow-through was limited. The decline stalled ahead of Tuesday’s low at $99.45, and the price rebounded back above both $100 and the 200-hour moving average.
Crude is now trading near $101.05, leaving it between the 200-hour moving average at $100.08 and the 100-hour moving average at $101.48. Those two levels frame the next battle between buyers and sellers.
The failed break below support disappointed sellers, but buyers still have work to do. A crack in a level that has held for an extended period can change traders’ mindset. Buyers who previously leaned confidently against the 200-hour moving average have now seen that support give way—even if only briefly.
To regain more control, buyers need to push the price above $101.48 and stay above it. That would strengthen the recovery and suggest today’s downside break was a failed attempt to shift control to the sellers.
Conversely, a move back below $100.08 and $100 would put sellers back in position to test $99.79, followed by the more important $99.45 low. Breaking that Tuesday low would add confirmation to the bearish move.
Until the price breaks free, the two hourly moving averages remain the key barometers. Watch for a sustained break and follow-through momentum. Today’s reversal is a reminder that getting through a technical level is only the first step. Staying through it is what gives traders greater confidence in the move.
This article was written by Greg Michalowski at investinglive.com.