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Potential for Lower Swing High
Today’s high has the potential to retain the downtrend price structure with a lower swing high. A drop below today’s low of $72.09 will establish a new lower swing high and retain the integrity of the downtrend that began from the $80.76 swing high. The downtrend remains in place unless there is a sustained rally above the February 11 interim swing high at $72.64.
However, if today’s high establishes a new lower swing high and it is subsequently broken to the upside, that could provide an early signal for a bullish change in trend. Nonetheless, a rally above today’s high prior to establishing a new lower swing high puts crude oil in a position to challenge the $72.64 swing high. Subsequently, if a $72.64 bull breakout triggers, the 200-Day MA at $74.49 becomes the next higher price target.
Next Lower Target at $70.52 if Decline Continues
Alternatively, the bearish correction continues to lower price targets, starting with the 78.6% retracement at $70.03. There is also a range of prior consolidation that represents potential support below the current retracement low at $70.52. Reaching the 78.6% retracement level could signal the completion of the decline. Notice that crude oil has been trading near trend lows recently and it has been showing signs of consolidation. In other words, bearish momentum has diminished.
Lower Level at $68.82
That could be the end of it but if not the $68.82 interim swing low marks a lower price target. A drop below Wednesday’s low of $72.07 shows weakness that could lead to lower prices if the breakdown is sustained. It may be easier to recognize on the weekly chart (not shown).
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