As of Friday morning, the crude oil market is experiencing some chart damage relative to the recent recovery in prices amid sentiment, which some may say has been risk off the past couple mornings. Visible in the 4 hour chart below are the varying levels and fundamental factors which may be considered. While the market has recovered somewhat from the nearly 45% drop from the mid-high $70s to the low $40s, it market seems poised for an outbreak based on the levels pictured. Should a risk off sentiment build and this morning’s chart damage continue, the trend line pictured may be broken. Should new highs be made with the pictured resistance being broken and becoming new support, there could be some space for the market to return to previous levels seen before the drop.
In addition to the possibility for the market to act as a proxy for global economic sentiment, the typical inventory, production and supply reports should be monitored as well.
Crude Oil Feb ’19 Daily Chart