Crude has been in a range for most of the month of September oscillating near the 50 day moving average. It had been unable to do much in the way of additional upside however until this month, when it finally broke out above resistance at the top of the range near the $48 level. Friday it managed to best 50 on an intraday basis but then faded well off the highs heading into the close.
Notice that the rally was stopped dead in its tracks by the falling 200 day moving average. That will serve to reinforce Friday’s high as a significant technical inflection point moving forward. If crude is going to be able to extent this month’s push higher, it will have to clear that level. If it does, a goodly number of shorts will come out as they have all been watching how this market handles itself near that 200 DMA. (more)
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