Oil Prices Hitting Resistance & Technically Looking Weak

Crude has risen over 25% since its bottom on Christmas Eve. The $42.50 level was a clear level that acted as support and resistance over the past 4 years (1st chart below). Quick fingers or a precise limit order would have been needed in order to get that price on the 24th. Oil prices jumped quickly from there on increasing volume in January.

Last week, oil completed a nearly 100% retracement of its one-month dive and pullback.

That retracement tested a resistance level just under $53.50 which is approximately at the 50-day moving average. A group of technical indicators went to overbought territory on this rebound (as expected) and are turning downward, making oil look technically weak. The round number $50 support can be looked at for nearby support, as it was used as support numerous times in November and again in December.