Technical Analysis Crude Oil for 8/26/15

Crude oil prices edged higher on Tuesday but should continue to feel the brunt of higher production and oversupply.  Ahead of Wednesday’s Department of Energy numbers that will report on inventories, prices generated an inside day.  Tuesday’s surprise cut in interest rates by the PBOC failed to buoy prices above Monday’s highs.

Resistance is seen near the 10-day moving average at $41.21, while support is seen near the Monday lows at $38.22.  Momentum has turned negative with the MACD (moving average convergence divergence) index generating a sell signal.  This occurs as the spread (the 12-day moving average minus the 26-day moving average) crosses below the 9-day moving average of the spread.  The index moved from positive to negative territory confirming the sell signal.