US Crude Oil futures may have reached a temporary bottom after dropping sharply in Tuesday's trading session. The recent breakout from the large Triangle chart pattern, shown here on the hourly time interval, followed through to the target area to complete the move.
The initial breach of support just above $80 per barrel triggered a cascade of selling action with very little retracement, Downward pressure continued, pushing the price briefly below $75 per barrel before a rebound rally in the afternoon. This swing low coincides with the lower end of the forecast price range from the breakout, with the closing price near the upper end of the projected target.
Renewed buying in Wednesday's session could potentially carry the price back to the initial breakout level above $80 to form a large sideways range on the longer term charts.
Despite short term strength, failure for crude oil to retake the $80 support level would set up for a continuation downward. A move below Tuesday's low at the bottom of the range would suggest a new leg down in a long term bear market has begun at this level.
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