Crude's Downtrend Remains Intact

As we noted yesterday, the $60 mark for crude is a key price level. Unfortunately for oil bulls, the commodity was unable to break above the top of its downward channel, and it finally gave way towards the end of trading yesterday to close at $57.71. Crude is trading slightly lower this morning as well, and it looks as if the downtrend remains intact.

click to enlarge

Comments

[Greg Pinelli:]

With all due respect...and I'm trying to muster at least a little..what your chart has to do with reality escapes me.
What will happen to those little comfort lines on those charts when oil can't be delivered as expected (Mexico and Venezuela)...or Iran hits a key Saudi oil supply link?? Or Burgan..in Kuwait...has a 25% greater depletion rate than previously believed?? Real world investing involves far more than resistance and support lines and linear abstractions from that technical comfort zone.

2007 Feb 08 07:53 PM

[Malkiel:]

I'm willing to accept some form of chartist argument about support levels if volume is included, but as far as I'm concerned patterns without volume don't validate support level theories. The basic issue with support levels is, How many recent buyers or sellers were there at a given level? Enough to predict heavy feeding of shares that might dampen a rally, or short supply that might allow an upward breach? Patterns without volume are truly tea-leaf reading...

2007 Feb 09 12:52 PM