The Next 4 Important Prices in Crude Oil

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The sun seems to be setting on Crude Oil ($USO, $CL_F). It has had a quick run lower for a price of about $108 down to $74 per barrel in less than 5 months. The bad news for those looking for a turn around is that the technical picture still looks bleak. The momentum indicators are pointing lower and the RSI (top scale) has only just moved in the bearish zone. With that backdrop there are 4 important spots to watch if there is more downside.

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Crude is in the middle of the first price zone from $72 to $75 per barrel. This range has shown to be important on the way higher in 2006 and as support in 2011 and 2012. Perhaps it will act as support again and we can forget about the levels below.

The second level is at $66 per barrel. Looking left on the chart you can see a significant difference in volume of crude that has traded above this level and below it. Without much price history below $66 a loss of this level could be significant.

Next is the $56 to $57.50 per barrel price zone. This area acted as support in both 2005 and from 2006 into 2007. Volume traded at this level is lower and may constitute weaker support.

The final level is listed at $50 per barrel. This is about where the rising 15 year trend support line (blue) would intersect the downward move. There is no prior price battle between buyers and sellers at this trend line, but for whatever reason it has shown significance in the past.

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