TheStreet RealMoney

Crude Oil Rallies Look Like Selling Opportunities

by Jim Wyckoff

Crude oil futures prices buckled Friday on news that a bill to bail out the U.S. auto industry failed to pass the U.S. Senate late Thursday, after House approval of the measure earlier in the week. The news immediately depressed U.S. stock index futures prices, which in turn pushed crude oil futures prices solidly lower and reversed Thursday's price gains in oil. From a technical perspective, Friday's price action confirms a steep five-month-old downtrend on the daily chart for January Nymex crude oil futures. January futures prices are presently trapped between technical support around the $40-a-barrel level and by technical resistance at $50. Brief rallies in the price of crude oil continue to be selling opportunities for the technically strong oil market bears. It would take a close in January crude oil futures prices above technical resistance at the last "reaction high" on the daily bar...

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