$40 is a significant price magnet that institutions obviously like to use as a bench mark. $40 Crude was sold in 1990, 2000, and 2003. It was bought in 2004 and 2009. I suspect that we will find buyers near 40 again. This may take a couple of months of sideways price action along 40.
Oil has penetrated the monthly trend line. Most trend line breakouts are not reversals and become with-trend entries. However, this in not a bull trend - it's a trading range. This is merely a bear leg in a TR, which is often bought near the lows. Price often gets vacuumed to the highs and lows of trading ranges, fooling many into believing it may breakout. However, most TR breakouts fail and reverse (in this case, up).
This is a sell climax, and two legs sideways to up are reliable. The first target is the EMA (20 bar). The next is a 50% retracement of the bear leg at around $70.
Oil has penetrated the monthly trend line. Most trend line breakouts are not reversals and become with-trend entries. However, this in not a bull trend - it's a trading range. This is merely a bear leg in a TR, which is often bought near the lows. Price often gets vacuumed to the highs and lows of trading ranges, fooling many into believing it may breakout. However, most TR breakouts fail and reverse (in this case, up).
This is a sell climax, and two legs sideways to up are reliable. The first target is the EMA (20 bar). The next is a 50% retracement of the bear leg at around $70.