Crude oil has been consolidating for the past four days or so following a sharp one-day bullish reversal last Wednesday. A corrective low of $55.23 was established on that day thereby completing a $25.52 or 31.6% decline in the price of crude when measured from the most recent swing high of $80.76 from mid-January. That low completed a 127.2% extension (close enough) of the largest advance (from May 2023 swing low) since the 2022 peak and touched the lower line of a descending parallel trend channel.
Consolidation Sets Stage for Next Run
On Tuesday, the price of crude oil continued to compress as the day’s trading range was the smallest since the early-April interim swing high, which was followed by a sharp drop to $55.23. At the time of this writing, crude is set to end the day’s session with a narrow range inside day with a low of $60.92 and a high of $62.12.
A decline below the low of the day has Monday’s low of $60.68 as the next lower target, followed by Friday’s low of $59.54. On the upside, there is initial potential resistance around Monday’s high of $62.74, followed by last Thursday’s high of $63.45. Thursday’s high just about completed a 50% retracement of the latest downswing.
