March Crude Oil Testing an Important Reference

Over the past four months, crude oil has declined about $50. However, during the past fourteen trading days, March crude oil had been rotating within a 4538-to-5078 balance range. On Friday, January 23, 2015, the market took out the 4538 fourteen-day balance low by three ticks early in the day session before rallying. This was followed by a late day selloff, settling within thirty ticks of the 4538 balance low.

When a volatile market such as crude oil is contained within a relatively tight range for several days, a significant move usually follows the breakout from balance. However, if an attempted breakout from balance fails, a rotation to the opposite end of that balance range is the most likely scenario.

If the market gains acceptance below the 4538 fourteen-day balance low, the market may test the 4420 weekly/monthly chart reference. Additionally, the next downside references on the monthly chart are 4383, 3944, and 3248.

If the market fails to gain acceptance below 4538 fourteen-day balance low, it may begin a rotation to the 5078 fourteen-day balance high.


Trading and investment carry a high level of risk, and CQG, Inc. does not make any recommendations for buying or selling any financial instruments. We offer educational information on ways to use our sophisticated CQG trading tools, but it is up to our customers and other readers to make their own trading and investment decisions or to consult with a registered investment advisor. The opinions expressed here are solely those of the author and do not reflect the opinions of CQG, Inc. or its affiliates.