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Crude oil triggered a continuation of its bearish correction on Tuesday, falling to a new 48-month low of $58.06, at the time of this writing. Trading continues near the lows of the day and will likely end in a bearish position, near the lows of the day. The high for the day was $61.88. Notice that crude is now testing support around the lower line of a declining trend channel.
That line is the 50% extension of the original channel bordered by blue trendlines. It may represent support but is too early to say. Furthermore, there are similarities between the current full decline from the January high at $80.76, and previous larger downswings when measured on a percentage basis.
Measured Moves Matched
As shown on the chart, there have been two previous large downswings since the 2023 peak of $95.50. The first (A) found a bottom after a 29% price correction and the second ended after a 25.3% decline. As of this week’s low, the current bearish correction has crude oil down by 28%. Once there is symmetry between the swings, there is a chance for signs of support and the completion of the correction. It is another piece of technical evidence identifying a potential short-term low in crude oil.
