In the video above, I take a look at the technical picture for crude oil, where buyers continue to lean against the rising hourly moving averages. Those levels help define the bullish bias, the risk for buyers, and what needs to happen to give sellers more control.
Buyers keep leaning against the hourly moving averages
The price last traded below both the 100- and 200-hour moving averages on October 12. Since then, corrective moves lower have stalled against either the 100-hour MA or the 200-hour MA before rotating back higher.
That repeated pattern tells traders where buyers are stepping in—and where sellers need to push to take back some control.
What would shift the bias?
The 100-hour MA is near $100.95, while the 200-hour MA comes in near $99.43. Those levels are the close risk and bias-defining barometers.
Hold above, and the buyers retain control. Move below the 100-hour MA, and the upside momentum starts to lose some steam. A break below the 200-hour MA would give sellers a stronger technical foothold after the steady October advance.
If sellers can break below both moving averages, the $97.00 to $98.48 swing area becomes the next downside target. That would also put the price back below an area that buyers recently worked to overcome.
What are the upside targets?
On the topside, the next key target is the swing area between $104.46 and $105.21. That area has been home to a number of highs going back to May and again in September.
Getting above it—and staying above it—would open the door for a move toward the $106.75 high.
For now, the buyers have earned the benefit of the doubt. The moving averages have repeatedly stalled the corrections. Sellers need to break that pattern to change the technical story.
This article was written by Greg Michalowski at investinglive.com.