Technical Analysis Crude Oil for 8/3/15

Oil prices moved lower on Friday, following weaker than expected consumer sentiment reported by the U of Michigan. The July Michigan sentiment drop to 93.1 roughly halved the June bounce to 96.1.Friday’s atypical downward revision, of 0.2 points, follows boosts of 1.5 in June and 2.1 in May. The IBD/TIPP index remained at June’s 48.1, versus a 54.0 cycle-high back in October of 2012.

Crude closed at a 4-month low and is poised to test support levels near the March lows at $42.03.  Momentum remains negative with the MACD (moving average convergence divergence) index printing in the red with a downward sloping trajectory.  The RSI continues to print a reading of 27, below the oversold trigger level at 30, which could foreshadow a correction.