The incredible volatility in the crude oil market has continued throughout the summer. After dipping as low as $26/bbl back in February, WTI crude oil prices nearly doubled in a matter of about four months. Once the run peaked above $51/bbl in June, oil prices once again performed a complete 180-degree pivot and slid straight back down to below $40/bbl by early August.
WTI quickly bounced off the $40 support level and logged seven consecutive days of gains this month to once again climb back above $49. But with WTI now hovering between $46 and $49, which technical levels should traders be watching?
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According to Turning Point Analytics, $40/bbl is the key to WTI maintaining its bullish technical picture.
TPA has said that Crudes low on 2/11/16 was probably the most important macro event in the past 12 months as it coincided with stocks rallying, a broadening of the market rally, a high yield rally, and a reduction in bond risk spreads, Turning Point wrote in a new report. However, if WTI doesnt hold that critical $40 level, all of the other markets mentioned above could be hit hard as well.
In addition to the $40 support level, Turning Point highlighted $52 resistance and $62 resistance as other technical levels to watch.
So far in 2016, the United States Oil Fund LP (ETF) (NYSE:USO) is down 1.4 percent.
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