Crude Oil: Testing the Low?

Today, WTIC dropped to USD48.80 as at 3.45 (ET). It looks like crude oil prices look set to re-test its low. There are numerous articles about shortage of storage capacity for excess crude oil and this could lead to much lower prices. For more, go here.

Looking at the daily chart, we can see that the technical indicators are weakening. This suggests that crude oil prices could fall back and possibly revisit the recent low.


Chart 1: WTIC's daily chart as at Feb 24, 2015_4.45pm (Source: Investorshub)

If the 2008-2009 low is a guide, we can expect crude oil prices to yo-yo around the USD40-50 mark for a few weeks (possibly months) before recovery set in.


Chart 2: WTIC's monthly chart as at Feb 24, 2015_4.45pm (Source: Investorshub)

Based on the above, I believe that some profit-taking for O&G stocks may not be a bad idea.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, O&G stocks.