Technical Analysis Crude Oil for November 17, 2015

Crude oil prices rebounded on Monday after testing the November lows at 40 per barrel early in the North American trading session.  Prices have been under pressure and Friday’s announcement by the IEA that global crude oil inventories climbed above 3 billion barrels.  Additionally, Baker Hughes, the oil service giant, reported that oil rigs increased in the latest week by 2, which reflects higher production and should additional downward pressure on prices.

Despite this information, crude oil price squeezed higher, closing up at 41.84, and poised to test resistance near the 10-day moving average at 43.91.  The RSI (relative strength index) which is a momentum oscillator that measures overbought and oversold levels, moved higher with price action reflecting accelerating positive momentum.  The current print of 38.6, is on the lower end of the neutral range.  Momentum as reflected by the MACD is negative with the index printing in the red with a downward sloping trajectory.