Crude Oil May Fall Below $82 Within Days: Technical Analysis

Crude oil may fall below $82 a barrel within days after settling below the 100-day moving average twice this week, according to a technical analysis by T&K Futures & Options.

The April contract, which becomes the front-month contract on Feb. 23, closed below the 100-day average of $88.36 on Feb. 15 and Feb. 16. The last time the contract slipped below the 100-day average was Nov. 23, when the intraday low was $81.82.

“This is a trend ender,” Michael Smith, president of T&K in Port Saint Lucie, Florida, said yesterday in an interview. “If it closes below the average for several more days straight, then it should go down to the Nov. 23 low.”

If the Nov. 23 support level is breached, the next support will be at $79.88, the contract’s intraday low on Sept. 28, Smith said.

To reverse the downward trend, “futures would have to close above $88.36 for a couple of days in a row,” Smith said. “Then there would be no resistance until $94.89, the Jan. 31 intraday high. It could get there pretty quick, within the next week or two if it holds.”

Crude oil for April delivery rose $1 on the New York Mercantile Exchange yesterday settle at $88.84 a barrel. The intraday low of $87.35 was below the 100-day moving average for a third consecutive day.

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